The stock market reached a new milestone on Thursday, with the Dow Jones Industrial Average moving above 27,000 for the first time. More broadly, indexes were mixed, as much of the gain in the Dow was due to the influence of a single high-priced component of the benchmark. Investors still aren't sure how to handle differing signals about the future of the economy, and some bad news from key companies weighed on sentiment. GameStop (GME -7.26%), Omnicell (OMCL -1.38%), and Cadiz (CDZI 0.97%) were among the worst performers. Here's why they did so poorly.
GameStop finishes its tender offer
Shares of GameStop dropped almost 7% after the video game retailer completed a tender offer for a portion of its outstanding stock. The company said that its offer to buy up to 12 million shares resulted in a final stock buyback price of $5.20 per share, which was roughly where the stock had closed late Wednesday. Yet the offer was oversubscribed by more than two times, meaning that most shareholders who tendered their stock will have only about 40% of their holdings accepted. Today's losses only add to the big hit GameStop shares have suffered in 2019, and many are still pessimistic about the retailer's chances for a full recovery.
Omnicell takes a short attack
Omnicell's stock fell 13% in the wake of a short-seller's assertions about the manufacturer of automated medication dispensaries. Analysts at GlassHouse Research said that the company hasn't been handling its revenue and earnings properly, taking sales in periods earlier than it should while not making write-offs of older inventory. Prior to today's move lower, Omnicell's stock had doubled since early 2018, and the company has seemed optimistic about its prospects for further growth. So far, Omnicell hasn't responded to GlassHouse's assertions, but it'll be interesting to see how the argument shakes out in the weeks and months to come.
Cadiz deals with disappointment
Finally, shares of Cadiz plunged 14%. The California legislature passed a bill that will halt Cadiz's efforts to mine groundwater in the Mojave Desert region of the state, requiring a new environmental review of the proposed project. The bill, which is expected to be signed by the governor of California, will set a 15- to 24 -month time frame for the completion of the review. Opponents of the project were pleased with the news, arguing that it will help preserve natural resources that are important for desert ecosystems in the area. For Cadiz shareholders, however, it represents a new obstacle for a key part of the company's overall strategic vision.