Investing

5 Stocks That Destroyed Shareholders This Past Week

Chris Lange

Published: January 9, 2016 10:15 am

Last Updated: January 13, 2020 3:14 pm

This was the first week of trading for 2016, and many shareholders were affected this week as we saw broad markets and China crumble. Both the Dow Jones Industrial Average and S&P 500 felt an impact from China’s semiconductor issues, but some companies absolutely destroyed shareholders, for multiple reasons, and the broad markets help give that extra push down.

While these were not the five biggest absolute losers of the week, of the active stocks, these all issued news or had news that took place and pushed the stocks down. 24/7 Wall St. has tracked five companies in which shareholders were destroyed last week.

Barracuda Networks

Barracuda Networks Inc. (NYSE: CUDA) crushed shareholders last week as the result of analysts bailing on the stock after earnings. The company reported its fiscal third-quarter financial results after the markets closed on Thursday, posting $0.07 in earnings per share (EPS) on $80.1 million in revenue. Consensus estimates had expected $0.08 in on $80.2 million. These earnings are more or less in line, but 10 analysts weighed in on the stock, with six of them downgrading it while the other four just lowered the price target.

Over the course of the week, the stock dropped roughly 42%. Shares of Barracuda were trading at $10.73 at the end of Friday’s session, with a consensus analyst price target of $28.60 and a 52-week trading range of $10.52 to $46.78.

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The fiscal third-quarter results for Container Store Group Inc. (NYSE: TCS), reported after the markets closed on Thursday, were a colossal disappointment. The company had a net loss of $0.04 per share on $197.2 million in revenue. That compared to consensus estimates of $0.05 EPS and revenue of $199.1 million. At the same time, the guidance was not good either, compounding this tragedy. The Container Store expects to have EPS in the range of $0.19 to $0.22 and net sales in the range of $222 million to $232 million in the fiscal fourth quarter, as well as a comparable store sales decline of 3% to 5%. Consensus estimates call for EPS of $0.30 and $238.93 million in revenue.

Over the course of last week, the stock dropped 48%. The Container Store shares closed at $4.22 on Friday, with a consensus price target of $16.43 and a 52-week range of $4.02 to $23.50.
Fitbit

Despite being above the $29 mark earlier this week, everything came crashing down for Fitbit Inc. (NYSE: FIT) shareholders following a lawsuit against the company. Some consumers are claiming that the heart rate tracking feature for Fitbit’s watch does not accurately track the beats per minute. There may also be valuation concerns because the short sellers increased their bets against Fitbit at almost every turn in 2015.

Last week the stock dropped nearly 26%. Shares of Fitbit were changing hands at $22.02 as Friday’s session came to a close, within a 52-week trading range of $20.25 to $51.90. The consensus analyst price target is $46.12.

MannKind

After MannKind Corp. (NASDAQ: MNKD) decided to terminate its insulin inhaler project with Sanofi-Aventis (or was it the other way around?), its shares took a massive downturn in Tuesday’s session. Both parties promptly will commence transition discussions in order to effect a smooth and orderly transition in the development and commercialization of Afrezza from Sanofi to MannKind over the next 90 to 180 days. Afrezza was pretty much the only reason MannKind has been relevant, and its sales have been more than disappointing versus the hype and promise that inhalable insulin should have brought.

The stock dropped roughly 54% over the course of the week. MannKind shares were trading at $0.66 on Friday’s close, with a consensus price target of $2.84 and a 52-week range of $0.64 to $7.88.

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Investors pummeled SunEdison Inc. (NYSE: SUNE) after it restructured more of its debt this week, sending the share price down 46% at one point. The restructuring deal extinguishes about $580 million in convertible debt and $158.3 million in preferred stock. The so-called Second Lien Secured Term Loans are expected to close on January 11, and SunEdison expects to receive $725 million in cash. After paying off approximately $170 million on its existing second lien credit facility, SunEdison will retain $555 million for, among other things, general corporate purposes.

The transactions will dress up the company’s balance sheet, but the price is very high, according to one analyst cited by Bloomberg. SunEdison’s interest expense is likely to grow by $40 million a year and existing shareholders are being slapped with about 18% dilution to the value of their shares. Over the past week, the stock dropped roughly 30%. Shares of SunEdison closed at $3.41 late on Friday, with a consensus price target of $14.93 and a 52-week range of $2.55 to $33.45.