Friday was fairly calm on Wall Street, with the Dow Jones Industrial Average closing modestly lower as the small-cap Russell 2000 index saw more significant decreases. Geopolitical tension between the U.S. and Iran remained on investors' minds, as did longer-term concerns in areas like trade and global economic growth. Yet some stocks saw big declines due to company-specific issues. Innovative Industrial Properties (NYSE:IIPR), Korn Ferry (NYSE:KFY), and Sprint (NYSE:S) were among the worst performers. Here's why they did so poorly.
Investors discount Innovative's latest expansion
Shares of Innovative Industrial Properties suffered a 13% drop despite the company announcing yet another deal to make a property acquisition for its cannabis-centered real estate portfolio. Innovative Industrial acquired a Michigan property in the central part of the state, paying $6.9 million and committing to another $3.1 million in reimbursements for tenant improvements. The cannabis real estate investment trust simultaneously entered into a lease with Emerald Growth Partners, which will use it as a licensed medical-use cannabis cultivation and processing facility. Today's decline came after a huge upward run for the marijuana REIT, which had climbed almost 60% during the month of June after announcing another huge dividend increase, and nothing about today's news suggests that the recent downward move is anything but a pause.
Korn Ferry disappoints
Executive search provider Korn Ferry saw its stock drop 17.5% following the release of its fiscal fourth-quarter financial report. Korn Ferry's results were reasonably good, with a modest rise in sales and a roughly 9% climb in adjusted net income. However, the company's outlook for the current quarter didn't live up to expectations, and stock analysts following Korn Ferry cut their price target on the company's shares, as they judged that economic weakness in China and elsewhere in the industrial sector could hurt the company's performance. Despite moves designed to make it less vulnerable to cyclical effects, Korn Ferry's shareholders seem nervous that they'll still lose out if economic conditions deteriorate in the U.S. and across the globe.
Sprint sees more challenges ahead
Finally, shares of Sprint lost 7%. The wireless telecom company ran into more obstacles in its efforts to merge with rival T-Mobile US, as four states added themselves to a complaint from attorneys general in other states to challenge the deal. Officials in Hawaii, Nevada, Minnesota, and Massachusetts joined peers from 10 other states, alleging that higher prices resulting from the deal would hurt consumers. The company still hopes to find ways to appease regulators and get the merger to go through, perhaps by divesting certain assets. Yet after long delays, Sprint investors are getting impatient for the deal to gain final approval, and any impediment to that could be devastating.