Stocks traded in a narrow range on Friday, mostly drifting sideways despite tensions in the Middle East and unresolved trade concerns. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) posted small losses.
Today's stock market
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Chewy goes public in a week of IPO frenzy
The market for IPOs continued to heat up today, with shares of online pet product seller Chewy getting snapped up by investors and soaring 59.1% over the offering price of $22 to close at $34.99. At market close, the company was valued at about $14 billion.
PetSmart acquired the seller of food, supplies, and medications for pets two years ago and will continue to own about 70% of the outstanding shares. Chewy had sales of $3.5 billion in 2018, an increase of 68% from the year before, and a net loss of $268 million, or $0.68 per pro forma share.
The stampede for Chewy stock caps a week that saw two other rapidly growing but massively unprofitable companies going public and soaring on their first day of trading. Cybersecurity company CrowdStrike Holdings went public Wednesday and closed 71% above the offering price, and freelancer marketplace Fiverr International gained 90% on its first day. Next week will be the highly anticipated IPO of collaboration software vendor Slack Technologies.
Trade war will take a toll on Broadcom
Chipmaker Broadcom reported mixed second-quarter results and cut guidance for the full year, and shares fell 5.6%. Revenue increased 10% to $5.52 billion, compared with expectations for a gain of more than 13%. Non-GAAP earnings per share of $5.21 beat the analyst consensus estimate by $0.03.
Broadcom's networking business continues to be strong, but weakness in wireless was a drag on results, as revenue from the semiconductor segment fell 9.9% to $4.09 billion. Revenue from the high-margin infrastructure software business, a result of the company's purchase of CA Technologies last year, was $1.41 billion, about flat from last quarter.
As expected, the trade conflict with China and particularly the Huawei export ban is taking a toll on the company's business. Broadcom said that the uncertainty is causing its customers to reduce inventories, and the company cut $2 billion out of its revenue forecast for 2019, lowering it to $22.5 billion. Broadcom said in the conference call that Huawei itself accounted for $900 million of its 2018 revenue.