Major benchmarks finished the week close to where they started, albeit with plenty of volatility along the way. Friday brought a return to nervousness about the future direction of the global economy, interest rates around the world, and trade policy. Some poor performance from individual companies created some stand-out stock moves to the downside. Farfetch (FTCH 6.63%), Waitr Holdings (WTRH -0.22%), and Nektar Therapeutics (NKTR -2.36%) were among the worst performers. Here's why they did so poorly.
Some investors find this company's long-term growth prospects a bit farfetched
Shares of Farfetch plunged 45% after the luxury fashion technology platform provider reported second-quarter results that disappointed investors. Farfetch tried to stress its growth, which included gross merchandise value gains of 44% and a 56% rise in active customer counts compared to year-ago levels. However, significantly larger losses weighed on sentiment, and some investors didn't seem to think that the just-announced $675 million acquisition of brand platform specialist New Guards Group was a smart strategic move. Farfetch has made similarly controversial purchases before, but despite executives' optimism about the company, the stock has lost half its value from its IPO less than a year ago.
Waiter, there's a fly in my earnings
Waitr Holdings saw its stock plummet 50% after the on-demand food ordering and delivery specialist released several pieces of news. Second-quarter financial results showed that revenue tripled from year-earlier levels, but net losses more than tripled along with it. The company also replaced CEO and founder Chris Meaux with former COO Adam Price, with Meaux taking the role of chairman of the board. Waitr also said that it has started a review of strategic alternatives to enhance shareholder value. That would ordinarily boost share prices, but analysts at Piper Jaffray cut their rating on Waitr from overweight to neutral and reduced their price target by $7 per share, all the way down to $4. Concern about the level of change has some fearing that Waitr won't be able to stay focused on its core business.
Nektar faces uncertainty
Finally, shares of Nektar Therapeutics closed lower by 29%. The biotech company released its second-quarter update, with results coming in reasonably strong. However, Nektar found problems with the manufacturing process related to its bempegaldesleukin cancer drug candidate, causing some to question whether trials conducted with the proposed treatment might be adversely affected. Until the company can clear up exactly what impact the slip-up might have had, investors will have to remain on guard for any negative surprises that could cause even bigger future declines.