Major benchmarks eased lower on Monday, although moves were generally small. Investors seemed reluctant to make big commitments in quiet holiday trading, instead hoping that they'll be able to figure out just what Chinese trade officials want in exchange for a potential short-term deal. Even with many market participants checking out today, some stocks still saw significant moves lower. CrowdStrike Holdings (CRWD +3.81%), SmileDirectClub (SDC +0.00%), and Parsley Energy (PE +0.00%) were among the worst performers. Here's why they did so poorly.
CrowdStrike gets struck
Shares of CrowdStrike Holdings dropped 9.5% after the digital security specialist got negative comments from a Wall Street analyst. Professionals at Citi started their coverage of CrowdStrike with a sell rating, and they set a price target of just $43 per share. That's still about 20% lower than where the stock closed Monday, and Citi just thinks that the company's shares have come too far too quickly. The silver lining is that even analysts who've panned the stock recently are respectful of CrowdStrike's business model, focusing solely on an inflated valuation in making their recommendations. That bodes well for CrowdStrike's long-term fundamental performance even if the share price does come under short-term pressure.
Image source: CrowdStrike Holdings.
Frowns for SmileDirectClub
SmileDirectClub's stock fell another 13%, adding to recent losses as the dental aligner company faces another new challenge. Over the weekend, the governor of California signed Assembly bill 1519 into law, creating new regulations surrounding the teledentistry model that SmileDirectClub has used to promote its business. The dental specialist tried to find the silver lining in the new law, asserting that the governor "clearly indicated that he expects all stakeholders to come together to find a better way to create policy around teledentistry." For now, though, investors are concerned that SmileDirectClub could have trouble working through what it called "arbitrary barriers to technological innovation."
Parsley makes a buy
Finally, shares of Parsley Energy finished lower by nearly 11%. The Austin-based energy company said it would spend $2.27 billion to buy Jagged Peak Energy (JAG +0.00%), including the assumption of Jagged Peak's debt. Under the deal, Jagged Peak shareholders will get 0.447 shares of Parsley in exchange for their stock holdings. Jagged Peak didn't get a big boost out of the deal, either, with its stock losing 1.5%. The move combines the two companies' holdings in the key Permian Basin, but energy investors don't seem convinced that consolidation in general is the best strategy -- especially as oil prices suffered another day of declines.
