The stock market had an up-and-down session on Monday, as investors struggled to reconcile the latest happenings in Washington politics with the various forces buffeting the U.S. and global economies. Major benchmarks traded on either side of the unchanged mark and finished mixed, with many market participants focused on new product announcements from Silicon Valley and the shape of the rapidly inverting yield curve. Some stocks performed badly, reflecting negative responses to news. Penn Virginia (NASDAQ:PVAC), Evolus (NASDAQ:EOLS), and Cousins Properties (NYSE:CUZ) were among the worst performers. Here's why they did so poorly.
Penn Virginia keeps falling
Shares of Penn Virginia dropped 9%, adding to their losses from Friday after the Houston-based energy company agreed to terminate a merger agreement. Denbury Resources (NYSE:DNR) had been slated to purchase Penn Virginia in a $1.7 billion deal that would have given Penn Virginia shareholders $25.86 per share in cash plus 12.4 shares of Denbury stock, but many found the deal controversial in light of uncertainties about whether Denbury's enhanced oil recovery techniques would be successful in boosting production at Penn Virginia assets. Without the merger to prop up its stock price and with crude oil dropping back below $60 per barrel, investors seem nervous about Penn Virginia's future.
Evolus gets ready to sell stock
Evolus saw its stock fall 12% following a filing that would allow the company to make a secondary offering. Late Friday, Evolus filed a registration statement under which its selling shareholders would offer more than 15.7 million shares of stock. The company itself won't receive any proceeds from the sale, with any money going straight to early investors in the performance beauty company. Insiders likely saw the timing as fortuitous to sell part of their stake, as Evolus just last week explained how it expects to compete against industry leader Botox with its Jeuveau frown-line treatment. Shareholders will have to reassess the risk of holding their stock given the apparent vote of no confidence from ground-floor investors.
Cousins makes a deal
Finally, shares of Cousins Properties fell 6%. The Atlanta-based real estate company announced that it would merge with Dallas-based TIER REIT (NYSE:TIER), issuing 2.98 shares of Cousins stock for every share of TIER. As Cousins CEO Colin Connolly explained it, the merger "creates the preeminent Sun Belt office REIT," with properties in key markets including Austin, Dallas, Phoenix, Atlanta, Charlotte, and Tampa. Yet investors felt that TIER got the better end of the deal, as TIER's shares rose 7%. Nevertheless, if the combination produces the synergies that the REITs expect, then it could prove beneficial to all involved.