The stock market had another up-and-down session on Wednesday, with the Dow Jones Industrial Average initially climbing more than 200 points only to fall to a 350-point decline before making up some of its lost ground. Major benchmarks were generally down slightly less than 1%, with investors pointing to uncertainties in Washington politics, the U.K. Brexit initiative, and the oil markets as potentially destabilizing factors. Some companies had particularly bad news that sent their stocks sharply lower. PG&E (NYSE:PCG), Switch (NYSE:SWCH), and Canopy Growth (NYSE:CGC) were among the worst performers on the day. Here's why they did so poorly.
PG&E heads for fire-sale prices
Shares of PG&E plunged another 22% as the California utility company continued to face concerns about its ability to pay for potential liability in the state's latest round of wildfires. PG&E had already seen big declines in previous sessions, but its latest comments indicated that it likely wouldn't have close to enough insurance coverage to handle any possible damage payments if the utility company's equipment is found to have caused the Camp fire in the northern California town of Paradise. With today's drop, PG&E shares have already lost almost half their value in less than a week, and even bondholders aren't certain about their likelihood of recovery in a worst-case scenario.
Switch turns off
Switch stock plummeted 24% after the technology infrastructure specialist reported its third-quarter financial results. Switch said that sales inched higher by 5% from the previous year's quarter, but net income plunged over the same period, just barely eking out a profit after taking non-controlling interests into account. CEO Rob Roy remains convinced of the company's prospects, asserting that "we are well aligned with industry dynamics and uniquely positioned to jump start enterprise migration into a hybrid cloud environment." Yet with earnings having vanished, Switch investors aren't confident about the strategic direction that the company has taken.
Canopy comes off its high
Finally, shares of Canopy Growth finished lower by 11%. The Canadian cannabis cultivation and distribution specialist posted a 33% revenue gain in its fiscal second quarter, but it reported the biggest loss in its history as a public company. Investors had expected faster sales growth, but Canopy was conservative in holding off on shipments for the Canadian retail marijuana market in advance of the mid-October effective date for legal sales of recreational cannabis. Marijuana investors really need to wait until companies announce fourth-quarter results before judging whether they've taken full advantage of opportunities in Canada and elsewhere around the world, but that didn't stop Canopy shareholders from bailing out early.