Major benchmarks generally did well on Friday, as investors were pleased to get good news on the employment front to help counter some of the weaker readings in economic data in recent days. After such a significant pullback in stocks, many market participants also seemed ready to have at least a short-term bounce. Yet for a few individual stocks, losses were unavoidable. HP (HPQ -0.20%), Heron Therapeutics (HRTX -2.97%), and Avnet (AVT 0.52%) were among the worst performers. Here's why they did so poorly.
HP to restructure
Shares of HP fell nearly 10% after the tech giant announced that it would undergo a major restructuring. The strategic shift will involve 7,000 to 9,000 layoffs over the next few years, representing as much as 16% of its total workforce. HP believes that the move could save $1 billion annually by the end of fiscal 2022, but it'll cost the company about $1 billion, including $100 million in the coming fiscal fourth quarter of 2019 and $500 million in fiscal 2020. HP also authorized another $5 billion in stock repurchases, and incoming CEO Enrique Lores said that "we are taking bold and decisive actions as we embark on our next chapter." Investors don't appear so certain, and they seem to want to see proof of a turnaround before betting on the stock.
Heron sells some stock
Heron Therapeutics saw its shares decline 10% following a secondary offering of its stock. The biotech company said that it had priced its offering of roughly 8.57 million shares at $17.50 each, generating gross proceeds of about $150 million. Heron intends to use the proceeds towards helping launch its HTX-011 treatment if it gains approval from the U.S. Food and Drug Administration, as well as other commercialization and clinical trial efforts. The cash will be useful for Heron, but shareholders weren't happy that the offering priced far below the closing price of $19.36 for the stock Thursday afternoon.
Avnet loses a customer
Finally, shares of Avnet dropped 9%. The electronic components distributor said in a filing with the U.S. Securities and Exchange Commission that Texas Instruments (TXN -0.60%) would no longer maintain a distribution relationship with the company. The filing indicated that products from Texas Instruments accounted for about 10% of Avnet's overall sales for fiscal 2019, showing the magnitude of the bad news. Avnet aims to find new customers to take up the slack, but after having worked well with Texas Instruments, it'll be hard to replace that lost business. Investors should therefore prepare for a possibly extended period of difficulty for the distributor.