The bulls picked up right where they left off on Friday… on a bullish foot. With nothing left to hold them back, the buyers managed to push the S&P 500 up 1.83% today, to a close of 1,987.05.
It wasn’t a wildly bullish day for all stocks, however. FireEye Inc (NASDAQ:FEYE), AtriCure Inc. (NASDAQ:ATRC) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) all got hit hard, albeit for understandable reasons. Here’s what happened.
Valeant Pharmaceuticals Intl Inc (VRX)
Just when it looked like the worst of the storm was behind them, Valeant Pharmaceuticals were battered and bruised again today … same story, bit of a different angle.
The story that upended VRX on Monday was the same one that put the stock into a tailspin back on Sept. 21. That prod was presidential hopeful Hillary Clinton’s tweet “Price gouging like this in the specialty drug market is outrageous.”
Although Clinton didn’t specifically name Valeant Pharmaceuticals as a proverbial perpetrator, there are few who would deny the company is the poster child for price-gouging specialty-drug makers.
By late last week, after more than a 30% pullback, it finally looked like the scare had run its course; shares rallied nicely with the market over the prior three trading days. The stink was raised once again today, though, when the New York Times ran this story, putting Valeant back in a very unfavorable light.
VRX closed 1o% lower for the day.
FireEye Inc (FEYE)
Investors were willing to overlook ridiculous valuations and habitual losses for cybersecurity stock FireEye, as long as the top line continued to grow and nobody was willing to point out there are too many companies chasing too few dollars in this market.
As they say, though, the jig is up. Piper Jaffray downgraded FEYE to “neutral” today, with analyst Andrew Nowinski saying of his decision:
“Our downgrade is primarily due to increasing competition, though we are also concerned with conflict within the channel and recent executive turnover. With FireEye set to begin lapping more difficult comparisons, we believe the factors noted above could make these comparisons even more difficult.”
Piper Jaffray lowered its price target on FEYE from $60 to $37, sending shares lower by nearly 4% on Monday to a close under $32.
AtriCure Inc (ATRC)
Last but not least, investors appear to be less than thrilled with an acquisition decision AtriCure announced today, judging from the 8.8% pullback ATRC logged.
AtriCure, a maker of atrial fibrillation and other cardio care devices, told shareholders on Monday morning it was spending $149 million worth of cash and stock to acquire cardiac ablation solution provider nContact.
Although the amount in question wouldn’t even be a drop in the bucket for most large medical equipment makers, AtriCure isn’t large, and is arguably spending cash and creating stock it can’t afford to let go of.
All told, the company will be forking over 3.7 million shares of ATRC plus another $8 million cash and up to an additional $50 million based on milestones to get the deal done.
For perspective, AtriCure only had a little more than $50 million in cash and cash-equivalents as of the end of the last quarter, and there are only 26.8 million shares in the float.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
