Why Yahoo!, Idenix Pharmaceuticals, and Progenix Pharmaceuticals Tumbled Today

The broader stock market posted big losses again today, and bad news hit several individual stocks hard. Find out why Yahoo! fell almost 9%, Idenix Pharmaceuticals dropped 10%, and Progenix Pharmaceuticals plunged 27% today.

Jan 29, 2014 at 8:31PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After a one-day respite, the stock market fell sharply again today, as the Federal Reserve chose not to change its glide-path toward curbing its bond buying under its quantitative easing program. Yet the roughly 1% drop in major market benchmarks paled in comparison to larger drops in Yahoo! (NASDAQ:YHOO), Idenix Pharmaceuticals (NASDAQ:IDIX), and Progenix Pharmaceuticals (NASDAQ:PGNX).

Yahoo! fell almost 9% despite reporting impressive revenue and earnings results that came in much higher than investors had expected, as well as favorable revenue guidance for the current quarter. But shareholders weren't pleased about the extent to which Yahoo!'s digital-ad share has dropped in recent years, and with earnings guidance suggesting that profit margins could narrow substantially, the bullish story for the Internet-portal giant took a bit of a hit today. Moreover, results tied to Chinese Internet player Alibaba, in which Yahoo! holds a 24% stake, suggested slowing growth there as well. The stock's earnings multiple is high enough that even small declines in future growth expectations can have a big impact on the share price if investors lose confidence in the trajectory of its revenue and net income.

Idenix dropped 10%, giving up a substantial portion of the 17% gains it posted yesterday. The biopharmaceutical company said on Tuesday that it would sell 16.42 million shares of stock to private-equity firm Baupost Group for $6.50 per share, helping Idenix raise more than $100 million in funding. Even though Baupost got a bargain price for the shares, paying more than 5% less than its closing value on Monday, investors still celebrated the vote of confidence on Tuesday. Even after today's drop, the shares fetch 11% more than Baupost paid, giving the company a nice immediate paper profit.

Progenix plunged 27% after results of its experimental PSMA-ADC treatment for prostate cancer reportedly included deaths of two patients in a phase 2 trial. In advance of comments that Progenix said it would make tomorrow concerning the study, investors had little choice but to speculate on the possible toxicity of the treatment and weigh it against its potential upside. With doubts about whether Progenix will move forward with a phase 3 trial of the treatment, investors are worried that a promising candidate could disappear from the company's pipeline.

Don't get impatient with your best stocks
Day-to-day drops shouldn't make you lose confidence in your portfolio, as long as your investment strategy involves buying shares in solid businesses and keeping them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Yahoo! 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers