The stock market fell sharply on Tuesday, starting the holiday-shortened week lower due to nervousness on several fronts. The Chinese economy has weakened dramatically, according to the latest reports from the emerging-market giant, and that's played a role in leading the International Monetary Fund to issue a downbeat assessment for global growth for 2019. Yet some stocks were still able to post solid gains despite the dour climate. eBay (NASDAQ:EBAY), Mercantile Bank (NASDAQ:MBWM), and PG&E (NYSE:PCG) were among the top performers. Here's why they did so well.
eBay attracts activist interest
Shares of eBay climbed 6% after the online auction and e-commerce marketplace became the focus of activist investors. Hedge fund investment company Elliott Management reportedly took a 4% stake in eBay, paying $1.4 billion and calling for the company to concentrate on improving its core business. Doing so, in Elliott's eyes, would require eBay to sell its StubHub ticket service and its classified-advertising business. Hedge fund Starboard Value also weighed in, reportedly taking a stake and adding its own reputation to Elliott's. Shareholders hope that whatever happens, eBay's stock price will get a lot closer to the $55 to $63 per share that Elliott thinks is the company's true value.
Bank on Mercantile for 2019
Mercantile Bank saw its stock gain 7% in the wake of the Michigan-based bank's fourth-quarter financial report. Mercantile said that net income jumped by nearly half compared to the previous year's fourth quarter, led by growth in income from various banking fees, strong asset quality, and increases in net loans. The bank also boosted its dividend by 4%, and CEO Robert Kaminski was pleased with Mercantile's ability to grow "in spite of continuing competitive pressures in our markets." With the move upward, Mercantile stock has regained a big chunk of the ground it lost in the second half of 2018, when concerns about interest rates weighed on financials across the industry.
PG&E gets a lifeline
Finally, shares of PG&E were higher by more than 6%. The beleaguered California utility found debtor-in-possession financing to cover its cash needs during the impending bankruptcy process, with four major banks stepping up to provide $5.5 billion in financing in the form of a revolving credit facility, a term loan, and a delayed-draw loan. Yet some institutional shareholders have argued that bankruptcy isn't necessary and could affect the value of the company adversely. At this point, PG&E expects to file for bankruptcy protection by the end of January, and if it does, there's still a very real risk that shareholders could suffer a total loss.