The stock market kept plugging along on Friday, drifting throughout much of the session as investors seemed content to remain patient for a resolution on certain key issues. In that environment, market participants paid a lot of attention to individual companies, looking for hints about the health of certain sectors of the economy. Some stocks posted substantial declines, and Pure Storage (NYSE:PSTG), VirnetX Holding (NYSEMKT:VHC), and Organogenesis Holdings (NASDAQ:ORGO) were among the worst performers. Here's why they did so poorly.
Pure Storage can't make the grade
Shares of Pure Storage fell 15% after the data solutions specialist reported its third-quarter financial results. Revenue rose 15% from the year-earlier period, with several product releases that aimed to help its clients make better use of their data via cloud-computing platforms. Yet losses widened from a year ago, and Pure Storage wasn't able to produce bottom-line growth even on an adjusted basis. More importantly, the rate of growth wasn't as high as shareholders had wanted to see. Pure Storage's guidance for the fourth quarter and the rest of the year also raised some concerns, and that made growth-oriented investors less comfortable with the company's prospects.
VirnetX has to start over
Licensing specialist VirnetX Holding saw its shares plunge 34% following an adverse decision in a key court case. VirnetX has been engaged in a long legal battle against Apple concerning alleged patent infringement in technology found in various iPhone models. A jury had previously found that Apple would need to pay about $503 million to VirnetX in the infringement case, but an appeals court on Friday set aside that calculation on a couple of key patents. That means that VirnetX will have to go through another trial to move forward, thwarting shareholders who had hoped to finally get a big windfall from the patent litigation.
Organogenesis sells some stock
Finally, Organogenesis' stock plummeted 22%. The regenerative medicine specialist said that it would sell 9 million shares at a price of $5 per share, with net proceeds after underwriting costs and associated expenses going toward providing working capital and helping with future costs of items like facility expansion or clinical studies. That came as a shock to investors, given that Organogenesis shares fetched $8 each as recently as three days ago. The company has lost money consistently for years, and today's drop shows the challenges for drug stocks in having to raise new capital at tough times.