Why Capstone Turbine, Monster Worldwide, and JDS Uniphase Tumbled Today

Stocks were narrowly lower on Thursday, but these three stocks fell much more dramatically. Find out why.

May 1, 2014 at 8:35PM

Yesterday's optimism over the record-setting performance of the Dow gave way to a more somber mood on Thursday, as broader stock markets fell slightly in anticipation of a critical jobs report due out Friday morning. For the most part, though, the moves in most major indexes were small, while Capstone Turbine (NASDAQ:CPST), Monster Worldwide (NYSE:MWW), and JDS Uniphase (NASDAQ:VIAV) all fell much more dramatically today.


Source: Capstone Turbine.

Capstone Turbine fell 14% after the producer of microturbines for electrical generation resorted to the public markets to obtain more capital, announcing a secondary stock offering of more than 18.8 million shares at a price of $1.70 per share. With that price fully 17.5% below where Capstone Turbine shares closed Wednesday, investors were understandably nervous about why the company had to accept such a hefty discount in order to raise a mere $32 million. The stock traded almost 50% higher than current levels just six weeks ago, and Capstone Turbine now faces questions about when it will finally put its loss-making days behind it. Until it succeeds in proving that it can turn a profit with its innovative power equipment, Capstone Turbine could continue to need more dilutive share offerings in the future.

Monster Worldwide plunged 18% following the release of the career-website specialist's most recent earnings report. Sales fell by 7% from the year-ago quarter, and adjusted earnings also failed to come in as strong as investors had expected. Monster Worldwide's guidance for the current quarter also fell short of investors' views. Monster Worldwide pointed to key acquisitions and joint ventures as helping its longer-term prospects. Yet, with the company having repurchased a quarter of its outstanding shares since the second quarter of 2013, the fact that Monster Worldwide's stock has fallen below the levels at which it traded during most of the past six months is troubling to advocates of smart capital allocation.


Source: JDS Uniphase.

JDS Uniphase dropped 14%, with the maker of fiber-optic components for telecom companies badly missing expectations for its fiscal third-quarter earnings. JDS Uniphase's revenue rose by 3%, but that was about 3% less than investors had hoped to see, and earnings also fell short by $0.01 per share. JDS Uniphase said that delays among its telecom customers in purchasing new equipment not only contributed to weaker results, but also could produce weaker results than expected during the current quarter. JDS Uniphase and its peers have waited a long time for increases in capital spending by telecom giants, but so far, their stinginess has hurt JDS Uniphase's stock severely.

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4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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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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