Why SINA, VIVUS, and Tenet Healthcare Tumbled Today

Even as the stock market gave up a small amount of ground today, these stocks got hammered hard. Find out why here.

Feb 25, 2014 at 8:30PM

Stocks finished narrowly lower on Tuesday, as investors seemed content with the impressive gains they've scored so far this month after a terrible January. Yet even though broad market benchmarks fell only a fraction of a percent, much larger losses hit shares of SINA (NASDAQ:SINA), VIVUS (NASDAQ:VVUS), and Tenet Healthcare (NYSE:THC) today due to company-specific news affecting their respective businesses.

SINA fell 9% after the company's quarterly earnings report prompted pessimism from investors and a price-target drop from analysts at Maxim Group. Sales grew by 43%, with impressive gains in both advertising and non-advertising revenue from SINA's key Weibo microblogging service. Yet growth in the number of average daily users of the Weibo service climbed by just over 4% from the third quarter, indicating slowing interest and increased competition from rival services. With no comments on speculation that SINA might make a public offering of shares of Weibo directly, investors didn't hear what they'd wanted the company to say to them today.

VIVUS dropped 13% despite seeing its losses narrow by 70% from year-ago levels, far exceeding the hopes of most investors. Yet another disappointing quarter of sales from the company's key Qsymia anti-obesity drug offset any enthusiasm from licensing deals for its erectile-dysfunction treatment. Moreover, the specter of potential new competition from Orexigen's (NASDAQ:OREX) Contrave later this year could pose an even bigger threat to VIVUS even if it can overcome its immediate need to drive sales higher.

Tenet declined 9% after reporting its own losses last night. Even after successfully completing its acquisition of Vanguard Health Systems, the hospital operator's guidance for 2014 disappointed investors, with EBITDA projections coming in 3% to 8% below what most investors had expected to see from Tenet. Even news yesterday that Tenet would expand a deal with Aetna (NYSE:AET) to accept insurance and participate in state-exchange plans in seven markets, further uncertainties about the way that health-care reform efforts will play out still exist. Many investors believe the risk-reward equation for Tenet doesn't look favorable enough to justify maintaining holdings in the stock.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of SINA. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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