Monday’s trading was marked by an up-and-down day that ultimately finished well for energy stocks, and slightly higher for most of the rest of the market. The S&P 500 Index creeped 0.07% higher, the Nasdaq Composite improved by 0.05% and the Dow Jones Industrial Average gained a single basis point.
Heading into Tuesday’s trading, United Continental Holdings Inc (NYSE:UAL) is cratering as anger grows — and goes international — over its handling of an overbooked flight, Whole Foods Market, Inc. (NASDAQ:WFM) is digesting a massive activist stake and RetailMeNot Inc (NASDAQ:SALE) is gapping up 50% on its own M&A news.
Here’s what you should know:
United Continental Holdings Inc (UAL)
UAL stock is headed steadily down this morning following the company’s continued mishandling of a passenger incident, and increasing overnight outrage in China.
On Sunday, United representatives asked various passengers to leave an oversold flight from Chicago to Louisville. However, one man — a doctor who said he needed to see patients on Monday — was literally dragged from the plane by airport officials after he refused to leave. Video showed that he was bleeding after the incident.
United CEO Oscar Munoz, who already put forth an “apology” that included a laughable amount of corporate speak, including “having to re-accommodate these customers,” defended the incident in a letter to United employees, saying the passenger was “disruptive and belligerent.”
That’s unlikely to calm a growing protest/boycott arm on social media, which is tossing out hashtags including #boycottunited and #dontflyunited. Especially worrisome for UAL is that much of the outrage stemmed overnight from China, where state-run media has reported that the man is of Chinese descent.
According to The New York Times:
By Tuesday afternoon, the hashtag “United forcibly removes passenger from plane” was the most popular topic on Weibo, China’s equivalent of Twitter, garnering more than 150 million views and more than 100,000 comments. Many Chinese social media users accused United of racism, while others called for a boycott.”
While United is primarily an American carrier that has a swath of international flights, it did boast “96 departures a week to cities in mainland China and Hong Kong” as of May 2016, says the Times.
United also slipped in some operational results on Monday, including projections of Q1 consolidated revenue passenger miles up 2.2% to 47.6 million, and a 2.6% increase in consolidated available seat miles to 59.8 million.
UAL shares were down 3% in Tuesday’s early trade.
Whole Foods Market, Inc. (WFM)
WFM shares are leveling out this morning after a late 10% pop on Monday following reports that Jana Partners LLC had taken a nearly 9% stake in the organic-focused grocer.
Immediately, Jana Partners declared that it had a lineup of potential board members ready, and the activist investor wants the company to “improve its technology and operations to better compete with larger rivals, shake up its board and find out how much a potential bidder might be willing to pay, according to people familiar with the matter,” according to the Wall Street Journal.
Whole Foods was sitting on a roughly breakeven 2017 prior to the announcement, which broke shares up and out to their highest point since mid-2016. The news was a much-needed kick in the pants for WFM, which has been hemorrhaging share to both larger rivals like Kroger Co (NYSE:KR) and smaller competitors such as Trader Joe’s.
Analysts have been particularly worried about slowing customer traffic, with comparable-store sales negative for more than two years.
Whole Foods responded later Monday with a typical polite boilerplate:
“We value constructive dialogue toward our shared goals of creating shareholder value, successfully executing on our strategic priorities and taking actions that will position the company for continued success.”
WFM shares were trading flat in Tuesday’s premarket action.
RetailMeNot Inc (SALE)
RetailMeNot announced some big news regarding the company’s fate late Monday.
The online coupon site has agreed to be acquired for $11.60 a share, which is about 50% higher than its closing price of $7.75. RetailMeNot offers coupons and promotional codes for e-commerce deals.
Harland Clarke Holdings Corp., a subsidiary of Ronald Perelman’s MacAndrews & Forbes Holdings Inc., will acquire RetailMeNot.
RetailMeNot’s business will be combined by Valassis Communications Inc., a similar coupon service that the firm bought back in 2013.
“RetailMeNot provides a new global digital channel to distribute our clients’ offers that perfectly complements Valassis’ current digital, mobile, mail and other print networks,” Victor Nichols, chief executive of HCH, said in the announcement.
SALE stock is primed to open roughly 50% higher Tuesday morning.