The stock market was reasonably upbeat on Wednesday, albeit with only minimal gains in some of the most popular indexes. Investors generally remain hopeful about the prospects for the U.S. economy to continue to expand, even as macroeconomic conditions around the world show signs of ongoing weakness. With the Federal Reserve apparently ready to slow its pace of monetary tightening if the domestic economy looks less robust, market participants are now looking forward to earnings from the first quarter of 2019 to see how individual companies are doing. Some companies had bad news to report, though, sending their shares lower. Lyft (NASDAQ:LYFT), PAR Technology (NYSE:PAR), and AmerisourceBergen (NYSE:ABC) were among the worst performers. Here's why they did so poorly.
Lyft hits the brakes
Shares of Lyft fell 11% as investors turned their attention to the upcoming IPO of its ridesharing rival. Industry watchers now expect Uber to sell about $10 billion in stock in its initial public offering, putting an overall value of $90 billion to $100 billion on the company. That's several times larger than Lyft, but it's also far less than the valuation that some investment banking experts had put on Uber as recently as six months ago. With Lyft continuing to take share away from Uber, it might well be that after Uber's IPO, Lyft could emerge as the true value in the ridesharing space.
PAR raises capital
PAR Technology's stock dropped nearly 14% after the provider of restaurant and retail software, systems, and service solutions announced its plans to conduct an offering of convertible debt. PAR said that it would offer $60 million in five-year convertible senior notes to qualified institutional investors in a private deal. The terms of the notes include the right for PAR to insist on redeeming them if the stock price rises to 130% of the specified conversion price of the notes for at least 20 out of 30 trading days on or after mid-April 2022. PAR's looking to use the money to pay down debt, but shareholders seem to fear that potential dilution cost them some upside from holding the stock.
Easy as ABC? Maybe not
Finally, shares of AmerisourceBergen declined by more than 4%. The pharmaceutical distribution company was the subject of negative comments from analysts at Morningstar, who lowered their economic moat ratings for AmerisourceBergen. According to Morningstar, AmerisourceBergen is one of several distributors facing an ongoing downward trend in drug spending growth, as well as the potential for unexpected news events that could affect the industry negatively. The analysts now see AmerisourceBergen's fair value at just $86 per share, down from $106 per share previously, and the company's reliance and focus on drug distribution makes it especially vulnerable if new regulation or other threats develop.