Why SINA, VIVUS, and Tenet Healthcare Tumbled Today

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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  • Report this Comment On February 25, 2014, at 8:55 PM, sp500chartdotcom wrote:

    I don't get it.

    The author speaks of VVUS talking a beating on weak Qsymia sales and the author points to a company (OREX- Orexigen) that has NO drug on the market as a possible reason.

    Why would the author fail to mention Arena's Belviq (ARNA)? In fact, looking at the last 6-8 weeks of both IMS and Symphony script numbers, Qsymia has been flat to down while Belviq has been rising.

    I cannot believe the author could fail to mention the one direct competitor who is actively taking market share from Qsymia.

  • Report this Comment On February 27, 2014, at 1:49 PM, marp11 wrote:

    ooooooooohhhhhhhhhhhhhh scary orex

    another 2 generic cocktail FDA will need much more data for this poisen

    BELVIQ EISAI ARNA

    GOLDEN

  • Report this Comment On February 27, 2014, at 1:50 PM, marp11 wrote:

    ohhh danny ooo danny boy

    yer masters will be angry today

    arna earnings and news coming

    shorts are destroyed

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