5 of Last Week's Biggest Losers
There's never a shortage of losers in the stock market. Let's take a closer look at five of this past week's biggest sinkers.
Let's start with Model N. A couple of analysts downgraded the company after the company issued a disappointing outlook for the new fiscal year that begins next month. Model N is forecasting revenue for the new fiscal year to clock in between $70 million and $80 million, well below Wall Street's target of $118 million on the top line.
EZchip Semiconductor stumbled after its biggest customer introduced a new product. Cisco accounts for nearly 40% of EZchip's business, and the market's fear is that its new nPower chip will eat into its orders for EZchip's networking chips. At least one analyst, Feltl & Co's Jeffrey Schreiner, is standing by his bullish rating and $39 price target. He argues that EZchip has managed to stay relevant despite seemingly threatening new products by Cisco in the past.
Nanosphere stumbled after pricing a secondary offering at a steep discount. The molecular diagnostics company priced 15 million shares at $1.75 apiece on Friday, and that's not what investors like to see when the stock had closed above $2 the day before. Nanosphere needs the money as it tries to gain traction with its gram-positive blood-culture test, but there's no joy in secondary offerings when a stock is near its 52-week low.
Glu Mobile also priced a secondary offering at a discount. The maker of smartphone and tablet games had to settle for a price of $2.10 for each of the new 6.3 million shares being issued. The stock was at $2.41 just before the news. Dilution is never a good thing, though Glu Mobile should be able to turn that capital infusion around into the development of new apps.
Finally we have Protalix BioTherapeutics sliding 11% on the week. The biotech exploring the commercialization of recombinant therapeutic proteins stumbled after raising $60 million through a convertible debt offering. The convertible nature of the financing means Protalix was able get by offering a mere 4.5% in interest, but that also means buyers can convert the notes to stock at a 22% premium to where the shares were when the pricing was announced.
In short, that's more dilution if Protalix appreciates in the future.
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The article 5 of Last Week's Biggest Losers originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.