Major indexes managed to post modest gains on Friday, capping a strong first half of 2019. Markets have recovered sharply since the worst levels of December 2018, and even though some fear that an economic slowdown might be ahead, there's considerable optimism that at least some of the challenges facing the global economy might ease up in the months to come. Yet among individual stocks, many companies still faced pressure from specific issues of their own. PG&E (PCG 0.64%), Pier 1 Imports (PIRRQ), and Sorrento Therapeutics (SRNE 2.94%) were among the worst performers. Here's why they did so poorly.
Will fire season hit PG&E again this year?
Shares of electric utility PG&E fell 4% as investors have once again gotten a reminder that the summer season in California will inevitably bring wildfires. Power lines have already gotten the blame in at least two fires in northern California, and others could follow as the season progresses. So far, this year's fires pale in comparison to the devastation wrought in past years, and investors have been optimistic that the utility's bankruptcy proceedings could help resolve some uncertainty. Yet the episodes show just how difficult it'll be to come up with a comprehensive solution to PG&E's liability problems -- especially if Mother Nature won't cooperate with more favorable weather conditions.
Pier 1 keeps sinking
Pier 1 Imports lost more ground on Friday, seeing its stock fall another 5% in the wake of difficult strategic moves to try to save the ailing retailer. Earlier this week, Pier 1 said that it would accelerate its planned closure of store locations, hoping to cut costs quickly enough to offset the big declines in same-store sales and large net losses that the home furnishings specialist has suffered. Pier 1's reverse stock split has thus far managed to keep it from having to deal with a New York Stock Exchange delisting, but the company will have to work hard to get its business moving in the right direction again.
Sorrento makes a cheap sale
Finally, shares of Sorrento Therapeutics plunged 21%. The biopharmaceutical company said that it had sold a combination of 8.33 million shares of stock along with three series of warrants to interested investors, with the entire package fetching $3 per share. The complicated transaction gives buyers the right to buy an extra share of Sorrento stock for $3.75 anytime between December 2019 and June 2029, as well as providing the opportunity to buy as many as two additional shares during set periods if certain conditions are met. The company expects to use the proceeds to work on its pipeline development, but as with past bouts of volatility, shareholders weren't pleased to see how low the pricing of the offering turned out to be.