Wall Street enjoyed a relatively quiet day on Wednesday that left most major benchmarks relatively close to their closing levels from Tuesday. Neither President Trump's trip to Asia nor election results in several key races Tuesday night were enough to produce any clear moves for stocks, and the holding pattern that market participants have seen in recent days remained in place. Despite the fairly sanguine mood among investors, some individual stocks suffered substantial declines. Snap (NYSE:SNAP), LendingClub (NYSE:LC), and Weight Watchers International (NYSE:WTW) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Snap gets whipsawed
Shares of Snap plunged over14.5% after the social media company reported disappointing results in its third-quarter financial report. Snap's growth remained quite strong at first glance, with a 62% rise in sales coming on a 20-million-user increase in daily active users to 178 million. Yet those who follow the maker of the Snapchat app were expecting even larger growth numbers, and Snap is facing criticism that its service is hard to use at the same time that it deals with unsold inventories of its Spectacles, prompting a one-time writedown during the quarter. Snap has ideas on how to rebound, but investors will want to see results first before they put too much confidence in the stock going forward.
LendingClub tightens up its standards
LendingClub stock gave up 16% on news that the lender would take steps to boost its requirements for borrowers to get money from the service. By using a new model for evaluating credit, LendingClub expects that it will make fewer loans and shift its overall portfolio toward higher-quality lending by favoring both higher-graded borrowers and having a tightened approval rationale within each quality grade of borrower. Competition among lenders has tempted players in the industry to loosen credit standards, but LendingClub knows that doing so is a path to becoming imprudent with its lending decisions. Investors should applaud the move, but the resulting short-term hit to growth instead sent shares downward.
Weight Watchers gives up its gains
Finally, shares of Weight Watchers International fell 12%. The move essentially reversed all of the weight-loss specialist's gains on Tuesday, which came as a result of Weight Watchers announcing strong revenue and earnings growth in its third-quarter financial results and increasing its guidance for the remainder of 2017. CEO Mindy Grossman had said that the launch of a new program was driving enthusiasm among current and would-be customers, with substantial gains in customer counts and total paid weeks of service. Yet today's drop left the stock essentially where it had been before Tuesday's big rise. With the key New Year's resolution season coming soon, a lot will depend on how successful Weight Watchers is in pulling in new customers in the months ahead.