Monday was a terrible day on Wall Street, as the Dow Jones Industrial Average finished with another huge loss, falling more than 500 points by the close. Other major indexes saw similar declines of about 2%. Investors are waiting impatiently for the Federal Reserve's next monetary policy meeting later this week, and they want the Fed to show that it won't keep raising interest rates at the same pace in 2019 that it has so far this year. Some companies also had bad news that sent their shares sharply lower. Molina Healthcare (NYSE:MOH), Dova Pharmaceuticals (NASDAQ:DOVA), and Farfetch (NYSE:FTCH) were among the worst performers on the day. Here's why they did so poorly.
Molina deals with Obamacare court ruling
Molina Healthcare saw its stock lose 9% in the wake of a controversial ruling from a federal court. A district court judge in Texas found that the Affordable Care Act became unconstitutional once the tax reform bill in late 2017 reduced the penalty for not having qualifying healthcare coverage to $0. The court did keep the law in place pending appeal, but for Molina, the threat of losing Obamacare would be a blow given how much effort the company has gone to in order to take advantage of the law's provisions.
Dova dives on shake-up, poor guidance
Shares of Dova Pharmaceuticals plunged 39% after the pharmaceutical company announced some major changes in its executive suite and gave preliminary financial results. Dova named David Zacardelli as CEO, replacing Alex Sapir. The press release was terse about Sapir's departure, saying only that he "is no longer President and Chief Executive Officer of the company effective as of December 16." Investors also weren't pleased with initial estimates of sales of its Doptelet liver disease treatment, with projections for just $2.4 million to $2.7 million. Until the new leadership team has a chance to prove itself, investors will likely remain gun-shy about Dova stock.
Investors have second thoughts about Farfetch
Finally, shares of Farfetch closed lower by 12%. The stock had initially climbed after last week's announcement that the luxury retail platform provider had offered $250 million to purchase footwear and streetwear marketplace Stadium Goods. Yet shareholders seemed to have second thoughts about the acquisition, perhaps concluding that the price tag as well as the possibility of stock dilution could outweigh the benefits of the deal. It'll be up to Farfetch to prove naysayers wrong, but the stock will likely remain volatile in the interim.