Thursday was a great day on Wall Street, as major benchmarks responded favorably to news that the U.S. and China would meet again to try to negotiate their differences on the trade front. The manufacturing-heavy Dow Jones Industrial Average fared the best out of the most-followed indexes, reflecting the key role that global trade plays in those companies' opportunities for revenue growth and profit. Broader-based measures did well but weren't able to keep up with the Dow in percentage terms. Still, some individual companies suffered from bad news that sent their shares lower. Dillard's (NYSE:DDS), MiMedx Group (OTC:MDXG), and Global Net Lease (NYSE:GNL) were among the worst performers on the day. Here's why they did so poorly.
Dillard's can't satisfy investors
Shares of Dillard's dropped almost 9% even after the company released second-quarter financial results that came in somewhat better than most of those following the department store retailer had expected. Dillard's managed to push revenue higher by 2% on a 1% rise in comparable sales, which was better than the consensus forecast among investors, and it narrowed its year-earlier loss substantially. The company's CEO was pleased with the improvement he's seen so far in 2018, but shareholders didn't respond well to Dillard's choosing not to issue guidance for the key second half of the year. For the stock to recover, Dillard's will have to make it all the way back to full profitability while building a sustainable strategy for fighting back against e-commerce competition.
MiMedx can't get paid
MiMedx Group stock fell 11% in the wake of disappointing news regarding one of the company's key product lines. An operator of Blue Cross and Blue Shield health insurance plans in five states including Texas and Illinois said that it would no longer provide coverage for patients using injectable amniotic-tissue products from MiMedx, claiming that they aren't medically necessary. The news is just the latest in a long series of setbacks for MiMedx, which has seen key executive leaders leave in the aftermath of a probe of accounting practices that will require the company to restate its financial results for several years. With the stock having fallen almost 80% since January, many worry that MiMedx can't afford to get too much more bad news.
Global Net Lease sells some shares
Finally, Global Net Lease finished lower by 5%. The company announced late Wednesday that it would sell 4 million shares of its stock in a secondary offering, with the intent of using the money to help fund future acquisitions of real estate properties. The sale price for those shares was set today, and the company' received $20.65 per share for the stock, or more than 6% below where the shares closed Wednesday. Investors didn't like the dilution, but with about $79 million in net proceeds, Global Net Lease hopes to make the most of opportunities in the real estate market right now to make the stock offering look like a smart decision in hindsight.