Big Moves in After-Hours Trading: Pandora and Twitter

Dow falls despite majority of its components ending the day higher.

Feb 5, 2014 at 9:00PM

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.

Even though the ADP private-sector jobs report came through with weaker numbers than expected today, the major indexes took it in stride. The Dow Jones Industrial Average (DJINDICES:^DJI) ended the day down just 5 points, or 0.03%, while the S&P 500 fell 0.2% and the Nasdaq lost 0.5%.

Of the three jobs reports scheduled for release this week, the one from ADP doesn't get as much emphasis as the other two. The Labor Department will release its report on Friday, and the weekly jobless-claims report comes out every Thursday. That's part of the reason investors didn't react too strongly to the ADP news, which reported 175,000 new jobs, compared with the estimate of 185,000. ADP also revised its December figure from 238,000 down to 227,000.

As for the Dow, the majority of its components -- 17 of 30 -- actually finished the day in the black. But the Dow is a price-weighted index, so the 0.83%, 1.09%, and 1.18% drops at Goldman Sachs (NYSE:GS), United Technologies, and Chevron, respectively, outweighed the gains made by companies with lower share prices. Goldman's drop probably came in reaction to a pending investigation, as New York state's superintendent of financial services requested documents from Goldman and other financial institutions in relation to a possible act of collusion to fix key benchmarks used for currencies and interest rates around the world. If Goldman traders are found to have taken part, the company could end up on the hook for a big fine.  

Elsewhere in the market, two big technology names, Pandora (NYSE:P) and Twitter (NYSE:TWTR), are tanking in after-hours trading after reporting earnings.

Pandora finished the day with a 0.08% gain but has fallen more than 9.4% after-hours. Revenue hit $200.4 million on a GAAP basis, a 52% increase from a year ago. while earnings on a GAAP basis hit $0.04 per share, up from $0.01. Sounds great, but the company is also spending more money to get listeners as the competition in the streaming video arena has heated up. Spotify and Apple's iTunesRadio are two notable services that have moved into Pandora's market, and they obviously don't care that Pandora was there first and is the current market leader. Costs will probably only continue to rise in the future, and that's not something investors want to see.  

As for Twitter, the stock closed the day down 0.53%, but has plummeted by more than 17% in the extended trading period. In its first earnings statement as a public company, revenue jumped from $112 million to $243 million, but the company also lost $1.41 per share during the quarter, compared with a loss of $0.07 a year ago. On an adjusted basis, the company posted earnings of $0.02 per share, while analysts were expecting a loss of $0.02, but user growth during the quarter came in lower than expected. Finally, Wall Street wanted to see a total of 244 million users, while Twitter reported 241 million. That's a 30% increase from the same quarter last year, but it also indicates that user growth is slowing. While the company certainly has a great future ahead of itself, investors will have to be patient, as today's decline proves that expectations for the company were set way too high.

Looking for the next big thing? Look no further.
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but also your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Matt Thalman owns shares of Apple. The Motley Fool recommends Apple, ADP, Chevron, Goldman Sachs, Pandora Media, and Twitter and owns shares of Apple. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers