Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why bebe stores, Tower Group International, and Rayonier Hit New Lows Today

Stocks held up reasonably well on Monday, with Nasdaq managing to gain slightly even as the S&P 500 and Dow Jones Industrials eased lower. All in all, the number of stocks hitting new yearly highs greatly outnumbered those reaching new lows for the year. But there were still a few stocks plumbing new depths, and among them were bebe stores (NASDAQ: BEBE  ) , Tower Group International (NASDAQ: TWGP.DL  ) , and Rayonier (NYSE: RYN  ) .

For bebe stores, today's 3% decline came after the retailer said after the market's close on Friday that it would abandon its lower-scale 2b concept, closing its 16 remaining stores in the 2b chain and focusing instead on trying to improve results at its namesake bebe business. As part of a broader restructuring, bebe stores will reduce its employee count in order to cut costs more generally, with 9% of the company's non-store corporate and field management staff expected to be affected by the move. Interim CEO Jim Wiggett hopes that the dual moves will put bebe in a better position financially to handle a tough retail environment, but extensive competition in the retail space will force bebe to work hard in order to convince investors that the stock's 50% plunge just since April represents a buying opportunity rather than a value trap.

Tower Group International fell another 11%, bringing its total losses over the past year to roughly more than 90%. The insurance and reinsurance specialist has been under pressure financially for a long time, and even though the company agreed to an acquisition from ACP Re at $2.50 per share, shareholders are worried that the proposed deal won't come to fruition. One concern that some have is that an "insolvency event" as defined under the parties' merger agreement might give ACP an out to cancel the deal or negotiate another price reduction. Meanwhile, regulators are scrutinizing Tower Group's business to ensure that policyholders are protected, and their actions only complicate the volatile situation.

Image source: Sean Mack.

Rayonier's share price plunged about 27% from Friday's levels, but investors shouldn't panic about the move. The timber company's plan to spin off shares of Rayonier Advanced Materials was completed today, and so the share price going forward now reflects Rayonier's remaining core business after the spinoff. Long-time shareholders will receive one share of Rayonier Advanced Materials for every three Rayonier shares they owned before the spinoff, and the new company will contain Rayonier's performance-fibers business while Rayonier holds onto its forest resources and real-estate businesses. Rayonier did get downgraded today, but the real economic impact for shareholders was far less than the big share-price drop would suggest.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett said this emerging technology is threatening his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping on to one company that could get you the biggest piece of the action. Click here to access a free investor alert on the company we're calling the brains behind the technology.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3013729, ~/Articles/ArticleHandler.aspx, 9/3/2015 11:53:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 2 hours ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 4:00 PM
BEBE $1.22 Down -0.03 -2.02%
Bebe CAPS Rating: **
RYN $23.15 Up +0.10 +0.43%
Rayonier, Inc. CAPS Rating: *****
TWGP.DL $0.00 Down +0.00 +0.00%
Tower Group, Inc. CAPS Rating: ***