Why Renren, Orbitz Worldwide, and Lake Shore Gold Tumbled Today

Wednesday's big drop in the stock market came after the Federal Reserve potentially signaled that interest rates wouldn't stay low as long as many investors had expected, but other factors also came into play to send these three stocks down. Learn the details here.

Mar 19, 2014 at 8:30PM

Few investors looked at the meeting of the Federal Open Market Committee yesterday and today as an opportunity for new Fed Chair Janet Yellen to demonstrate any appreciable hawkishness in terms of interest rate policy. But market participants interpreted one comment Yellen made as signaling a possible interest rate increase sooner than they had expected, and that sent broad market benchmarks down on the day. Even so, the market' drop of less than 1% paled in comparison to the losses that Renren (NYSE:RENN), Orbitz Worldwide (NYSE:OWW), and Lake Shore Gold (NYSEMKT:LSG) suffered Wednesday.

Renren dropped almost 10% after the Chinese Internet company delivered quarterly results that fell short of the growth expectations that investors had for the company. Competition with Sina's (NASDAQ:SINA) Weibo and other industry players have weighed on Renren's results, which featured a nearly 30% plunge in revenue and a drop of 20% in monthly active users to just 45 million. Net losses were 75% greater than they were this time last year, and as bearish analysts pointed out, just about the only thing Renren has going for it is a huge war chest of cash and short-term investments. Nevertheless, without a strong strategy in place, shareholders can't be sure Renren won't squander that cash rather than getting good value for investors.

Orbitz fell 9% after analysts at Goldman Sachs downgraded the online travel portal. With rival priceline.com (NASDAQ:PCLN) having bought Kayak, Orbitz will no longer have an exclusive relationship with Kayak to help drive results. Moreover, Orbitz shares have actually jumped more than those of Priceline and its other rivals so far this year, and so Goldman argued that the risk-reward potential didn't justify further gains for Orbitz unless it can successfully overcome some of the obstacles in its path toward growth.

Lake Shore Gold tumbled 12.5% despite reporting record operating results in its latest report. Gold production more than doubled year-ago quarterly figures, and all-in sustaining costs fo the quarter fell to just under $850 per ounce. Even though adjusted earnings more than tripled year-ago levels, a massive $225 million impairment charge reflected the impact of falling gold prices on the company. Moreover, with gold prices taking a huge hit after the Fed's announcement earlier today, even optimistic production guidance and cost savings might not be enough to make Lake Shore Gold a growth candidate in the near-term.

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