Why Snap Inc (SNAP), Dunkin Brands Group Inc (DNKN) and Valeant Pharmaceuticals Intl Inc (VRX) Are 3 of Today’s Worst Stocks

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Inspired by a strong ADP payroll report for March, which bodes well for the Friday’s comparable report from the Department of Labor, the bulls dug in early on Wednesday. They weren’t quite as stoked by the time the session ended, however. The S&P 500’s close of 2,352.95 was 0.31% less than Tuesday’s last trade.

Why Snap Inc (SNAP), Dunkin Brands Group Inc (DNKN) and Valeant Pharmaceuticals Intl Inc (VRX) Are 3 of Today's Worst StocksIt could have been worse, however. You could have owned Dunkin Brands Group Inc (NASDAQ:DNKN), Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Snap Inc (NYSE:SNAP) as of this morning. These three stocks ranked among the worst of the worst, albeit for understandable reasons.

Snap Inc (SNAP)

There’s no ironclad proof to support the damning claims of former Snap employee Anthony Pompliano. But, it’s not difficult to believe what he’s saying about the inaccurate picture the company is painting for SNAP investors.

In 2015, before the parent company of online messaging service Snapchat went public, Pompliano was recruited away from Facebook Inc (NASDAQ:FB). Less than a month later, he was fired, calling into question exactly what Snap intended when the company hired him. He’s now claiming he was only brought into the fold long enough to dish out some trade secrets. Yet, he was there long enough to know that Snap is “falsely misrepresenting” its key metrics to SNAP stockholders … at least according to a lawsuit he filed in January.

Rather than fight it out in court, as of yesterday Snap is reportedly looking to settle the matter in arbitration, where his information won’t become a matter of public record. That in itself isn’t a concession that Pompliano’s claims are true, but it’s suspicious enough to send Snap shares down to the tune of 6.5% on Wednesday.

Valeant Pharmaceuticals Intl Inc (VRX)

OK, so maybe the turnaround plan Valeant Pharmaceuticals CEO Joseph Papas had in mind isn’t going to work so well after all. The beleaguered drugmaker was aiming to sell off some sizeable pieces of itself to pay down its massive debt and put some working capital in its pocket, but is reportedly having trouble finding buyers at prices it can live with.

The company had successfully sold its Dendreon unit and its skincare brands in January, garnering just a little over $2 billion. It’s not much, but it’s a start, implying Valeant was getting fair prices. Not so with its iNova subsidiary though. Wells Fargo reported it was hoping to secure $1 billion for the business, but the highest bid thus far is only $900 million.

Nervous VRX shareholders pushed the stock 6.6% lower today … to the lowest price since 2008.

Dunkin Brands Group Inc (DNKN)

Finally, Dunkin Brands Group — as in Dunkin Donuts — saw its stock lose 3%, though through no fault of its own. Rather, investors were simply taken aback by what the buyout/privatization of rival Panera Bread Co (NASDAQ:PNRA) might mean for the chain of donut shops.

Private equity firm JAB has offered $7.5 billion to Panera shareholders, who will presumably take the deal, which is 20% better than Tuesday’s closing price. PNRA shares are up 52% for the year, with an acquisition offer largely anticipated.

Many DNKN investors, however, were expecting an offer for their shares instead. Now that possibility seems considerably less likely.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/04/why-snap-inc-snap-dunkin-brands-group-inc-dnkn-and-valeant-pharmaceuticals-intl-inc-vrx-are-3-of-todays-worst-stocks/.

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