Wednesday was a good day on Wall Street, as major benchmarks gained as much as 1%. Investors still have a lot to think about when it comes to various macroeconomic and geopolitical pressures, but some progress on the trade front seemed to calm the markets even amid a potential impeachment of President Trump. Some companies had to deal with challenges that sent their share prices lower. Coeur Mining (NYSE:CDE), Lannett (NYSE:LCI), and McDermott International (NYSE:MDR) were among the worst performers. Here's why they did so poorly.
Coeur gets tarnished
Shares of Coeur Mining fell 9% on a bad day for the precious metals markets. Coeur mines a lot of silver, and silver prices were weak today, dropping about 4% to fall below the $18-per-ounce mark. Lately, precious metals have done well when the broader stock market has struggled, and so today's boost of confidence for stock investors led to some selling for gold and silver stocks. Yet operationally, Coeur has a lot going for it, and it's been in a great position to capture the uptick in silver prices that has happened over much of 2019. Nevertheless, shareholders should expect Coeur stock to remain just as volatile as the overall market.
Lannett raises cash
Lannett saw its stock drop almost 18% after taking steps to raise cash. The generic-drug maker announced late yesterday that it would offer $75 million of convertible seven-year notes, and that offering priced early this morning. The notes will carry an interest rate of 4.5%, which is fairly high for a convertible offering, especially with low rates generally prevailing throughout the bond market. Moreover, bondholders will be able to convert at an implied price of $15.29 per share, which was only 10% higher than where the stock closed Tuesday. That creates a lot of risk from future conversion, and current shareholders didn't like having so much of their upside taken away from them.
McDermott continues to struggle
Finally, shares of McDermott International lost 4%. The troubled engineering and construction company continued to work to try to resolve financial challenges that created a huge drop in the stock price recently. The company's subsequent suggestion that it might look to sell off one of its units, Lummus Technology, to raise cash got a positive reception from the market, but it could take time for a suitable transaction to take place. That has McDermott looking for some form of bridge financing to take care of liquidity needs in the meantime. The sentiment among shareholders today, however, seemed to indicate concerns about whether energy markets will hold up well enough to bring a good price for Lummus.