4 Companies That Destroyed Shareholders This Past Week

By Chris Lange Updated Mar 13, 2:58PM EDT · Published Dec 19, 10:25AM EST

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4 Companies That Destroyed Shareholders This Past Week — © Thinkstock

This past week was a rough one for the broad markets, both the Dow Jones Industrial Average and S&P 500 had less than spectacular weeks. Much of this can be attributed to the strengthening dollar, dropping oil prices and the Federal Reserve rate hike — although there was a brief rally Wednesday. As a result, many shareholders have taken punishment in some form, but some have been absolutely obliterated.

24/7 Wall St. has tracked four companies in which shareholders were destroyed last week. Many of these companies have seen their markets caps drop sharply.

KaloBios Pharmaceuticals

KaloBios Pharmaceuticals Inc. (NASDAQ: KBIO) dropped on perhaps the biggest news story of the week, the arrest of Martin Shkreli. This hedge fund manager and CEO of both Turing Pharmaceuticals and KaloBios has faced incredible social outrage since earlier this fall when he jacked up the price of an AIDS drug by over 5,000%. However, his arrest had nothing to do with that. Shkreli was under investigation by the FBI and U.S. Securities and Exchange Commission (SEC) for securities fraud.

It never looks good when your CEO is arrested and under investigation for these things. Turing already had replaced him with Chairman Ron Tilles.

Shares of KaloBios were trading at $23.59 on Friday’s close, with a consensus analyst price target of just $5.00 and a 52-week trading range of $0.44 to $45.82. Over the course of the week, shares dropped about 15%.
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3M

Last week, 3M Co. (NYSE: MMM) announced guidance for the 2016 full year and an update for 2015. Reflecting the realities of a continued slow-growth global economy, the company expects 2015 full-year organic growth of approximately 1.0%, versus prior guidance of 1.5% to 2.0%. Earnings per share (EPS) are anticipated to be approximately $7.55, against a prior range of $7.60 to $7.65. The Thomson Reuters consensus estimates call for $7.63 in EPS on $30.38 billion in revenue.

As for 2016, EPS is expected to be in the range of $8.10 to $8.45, an increase of 7% to 12%, compared to the consensus estimate of $8.40. Organic local-currency sales growth is expected in the range of 1% to 3%, and the free cash flow conversion rate of 95% to 105%. However this may not have been what investors were looking for.

Shares of 3M closed trading at $146.92 on Friday, with a consensus price target of $159.36 and a 52-week trading range of $134.00 to $170.50. Shares dropped about 6.5% from the high on Monday.
Teekay

Teekay Corp. (NYSE: TK) stock absolutely cratered after it announced, in conjunction with its master limited partnerships, that they all would be cutting their dividends by as much as 90%. Shares hit a new 52-week low in Thursday’s session. With global oil prices dropping, the shipping industry is feeling the pain as well. Peter Evensen, president and chief executive of Teekay, further explained:

Although it is painful in the short-term to have to temporarily reduce Teekay Corporation’s dividend, management and our Board of Directors believe Teekay and its shareholders will achieve greater long-term value creation by focusing on enhancing the value of our ownership interests in Teekay Offshore and Teekay LNG and being in a better position to support their continued growth and distributable cash flow generation.

Shares of Teekay ended the week at $8.80. The consensus price target is $42.70, and the 52-week range is $6.65 to $52.82. Shares dropped 56% last week.
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Atara Biotherapeutics

Atara Biotherapeutics Inc. (NASDAQ: ATRA) announced results from its Phase 2 proof-of-concept clinical trial for PINTA 745 for the treatment of protein energy wasting in patients with end stage renal disease. However, looking at a broader picture of the company, the bad news may not be so bad.

A failed trial is always bad, but Atara has a strong cash balance behind it, not to mention a solid pipeline. Unfortunately, the company will suspend further development of PINTA 745. Given the reaction seen within the stock, investors had previously heavily priced in this drug, and the company lost a significant portion of its market cap on Monday.

Atara shares closed trading at $24.08 on Friday, within a 52-week range of $17.20 to $65.56. The consensus price target is $31.80, and shares dropped just under $10, or about 30%, over the past week.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.