The stock market got another positive bump on Thursday, with investors getting into the holiday mood a little bit early. The Dow Jones Industrial Average (^DJI +1.38%) closed higher by 197 points to 35,950. The S&P 500 (^GSPC +1.15%) closed just shy of a record high, climbing 29 points to 4,726, while the Nasdaq Composite (^IXIC +1.38%) picked up 131 points to 15,653.
The end of the year often brings some volatile moves for individual stocks, and it's consistently the ones that have gotten a lot of attention or made big moves during the year that end up seeing the largest swings. Electric-vehicle company Nikola (NKLA +0.00%) hit the gas in a big way on Thursday, but popular footwear-manufacturer Crocs (CROX +5.16%) took a pretty big hit. Below, you'll find more on what's happening with both companies.
Nikola delivers
Shares of Nikola were up almost 18% Thursday. The electric-truck company made an announcement that gave investors optimism about the prospects for a rapid future ramp-up.
Image source: Nikola.
Nikola said late Wednesday that it had made its first customer delivery. The milestone was a landmark event for the company, which had seen considerable controversy amid skepticism about whether Nikola would ever be able to get to this point.
Moreover, Nikola's announcement promised that there'd be more deliveries to come. That's something that shareholders have obviously been counting on seeing.
It's important to put today's rise in the proper context, though. The move was enough to push the stock price above the level at which it had traded back when it was a special purpose acquisition company that hadn't yet identified Nikola as its eventual target to bring public.
However, at just $11 per share, Nikola is still more than 80% below its record levels set back in early 2020. It could take a lot more deliveries to get investors fully convinced that the truck manufacturer has really completed its comeback.
A bad buyout idea?
By contrast, shares of Crocs fell almost 12%. Investors reacted negatively to the latest strategic move from the casual-footwear company.
Crocs announced early Thursday that it had agreed to buy the privately owned footwear-company Heydude for $2.5 billion. The deal will send $2.05 billion in cash to Heydude's shareholders, with $450 million in Crocs shares going to Heydude founder/CEO Alessandro Rosano.
Crocs had good things to say about the deal. The company sees the acquisition as adding immediately to revenue growth and earnings, and it expects to see considerable free cash flow result from the combination. Crocs hopes to reduce leverage on its balance sheet as that cash comes in.
Yet investors seemed unhappy about the deal, perhaps because Crocs will have to add to its debt in order to come up with the $2.05 billion in cash to pay for Heydude. Some also suggested that the price paid was simply too high, with some dilution also coming from the stock portion of the buyout price.
The pullback in the stock gave back only a portion of the huge gains Crocs shareholders have enjoyed in 2021. Still, investors have been quite comfortable with the shoemaker's strategy already, so some might wonder if Crocs is doing too much rather than staying with what's already working.
