Please ensure Javascript is enabled for purposes of website accessibility

Why Mobile Mini Stock Sank Today

By Joe Tenebruso - Mar 9, 2020 at 10:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Major macroeconomic events could dent the storage provider's profits.

What happened

Shares of Mobile Mini (MINI) declined by 14.5% on Monday. The portable storage company is facing some serious challenges -- and investors are growing increasingly concerned.

So what

The first risk factor that Mobile Mini lists in its 10-K annual report is as follows (emphasis added): 

Our business is subject to the general health of the economy, including non-residential spending and energy prices[. A]ccordingly any slowdowns or decreases in the U.S. or international economy could materially affect our revenue and operating results.

Mobile Mini goes on to note that an economic slowdown could negatively affect its business in several ways, such as reducing demand for its portable storage solutions and limiting its ability to charge attractive rates for its products -- all of which would weigh heavily on its profits and cash flow.

Well, oil prices just fell by more than 20% after OPEC failed to strike a deal to cut production, resulting in mayhem in the energy industry. Worse still, the U.S. and international economy are likely to be severely weakened by the COVID-19 coronavirus outbreak. Two of the biggest risks to Mobile Mini's business -- a major economic slowdown and plunging energy prices -- are both occurring at the same time. 

A person pointing to a stock chart that rises then falls.

Mobile Mini's shares have fallen hard in recent days. Image source: Getty Images.

Now what 

Mobile Mini is attempting to merge with fellow storage provider WillScot (WSC). The all-stock deal is expected to close in the third quarter, pending regulatory and shareholder approval. The added uncertainty of the merger is likely contributing to the volatility in Mobile Mini's share price -- WillScot's stock also declined sharply on Monday -- and could continue to do so until the deal is finalized later this year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mobile Mini, Inc. Stock Quote
Mobile Mini, Inc.
MINI
WillScot Corporation Stock Quote
WillScot Corporation
WSC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.