The stock market posted moderate gains on Friday, finishing a week that has featured multiple record closes for some of the major benchmarks. With the S&P 500 ending above the 3,000 mark and the Dow having hit 27,000, investors seem almost euphoric about the chances that the bull market will be able to continue for the foreseeable future. Yet some stocks found themselves left out of the rally, with company-specific news hitting their share prices. Innovative Industrial Properties (NYSE:IIPR), Hillenbrand (NYSE:HI), and Canopy Growth (NYSE:CGC) were among the worst performers. Here's why they did so poorly.
Innovative Industrial raises more capital
Shares of Innovative Industrial Properties lost more than 8% after the cannabis-related real estate specialist announced the pricing of its secondary offering of stock. The marijuana REIT sold 1.3 million shares of newly issued stock at $126 per share, raising gross proceeds of almost $164 million. Innovative Industrial boosted the size of the offering by 50,000 shares from its original plans, and it said it intends to use the money to invest in more real estate assets that support legal cannabis cultivation and processing. Even though the stock reacted negatively to the news, the fact that the marijuana REIT is still getting substantial interest from investors should be a long-term positive.
Is Hillenbrand paying too much for Milacron?
Hillenbrand's share price dropped 13% after the industrial company announced a $2 billion acquisition. Hillenbrand plans to buy out plastics specialist Milacron Holdings, paying $11.80 per share in cash and 0.1612 shares of its own stock to Milacron investors. Hillenbrand CEO Joe Raver was positive about the strategic move, arguing that "Milacron aligns with our profitable growth strategy and acquisition framework, and we expect the additional capabilities from its high-performing segments to accelerate free cash flow generation and improve margins across the business." Hillenbrand shareholders didn't seem to agree that Milacron is worth that price, but only time will tell whether the combined company will live up to its full potential.
Canopy struggles to move on
Finally, shares of Canopy Growth fell 8%. The marijuana company has been a leader in the budding industry, but the recent dismissal of co-CEO Bruce Linton has created considerable uncertainty about Canopy's future. Linton was an instrumental figure in promoting mainstream acceptance of cannabis, and his passion as a founder of the business seemed like a big positive for many shareholders. Yet Constellation Brands, which holds a large stake in the pot specialist, recently expressed some frustration with Canopy's results, and that highlighted friction between it and Linton. Now, it could be tough for Canopy to find an executive that can both work with Constellation and be an advocate for cannabis, and investors appear to be seeing the dangers involved with such a rapidly changing industry.