Few investors looked at the meeting of the Federal Open Market Committee yesterday and today as an opportunity for new Fed Chair Janet Yellen to demonstrate any appreciable hawkishness in terms of interest rate policy. But market participants interpreted one comment Yellen made as signaling a possible interest rate increase sooner than they had expected, and that sent broad market benchmarks down on the day. Even so, the market' drop of less than 1% paled in comparison to the losses that Renren (NYSE:RENN), Orbitz Worldwide (NYSE: OWW), and Lake Shore Gold (NYSEMKT: LSG) suffered Wednesday.
Renren dropped almost 10% after the Chinese Internet company delivered quarterly results that fell short of the growth expectations that investors had for the company. Competition with Sina's (NASDAQ:SINA) Weibo and other industry players have weighed on Renren's results, which featured a nearly 30% plunge in revenue and a drop of 20% in monthly active users to just 45 million. Net losses were 75% greater than they were this time last year, and as bearish analysts pointed out, just about the only thing Renren has going for it is a huge war chest of cash and short-term investments. Nevertheless, without a strong strategy in place, shareholders can't be sure Renren won't squander that cash rather than getting good value for investors.
Orbitz fell 9% after analysts at Goldman Sachs downgraded the online travel portal. With rival priceline.com (NASDAQ:BKNG) having bought Kayak, Orbitz will no longer have an exclusive relationship with Kayak to help drive results. Moreover, Orbitz shares have actually jumped more than those of Priceline and its other rivals so far this year, and so Goldman argued that the risk-reward potential didn't justify further gains for Orbitz unless it can successfully overcome some of the obstacles in its path toward growth.
Lake Shore Gold tumbled 12.5% despite reporting record operating results in its latest report. Gold production more than doubled year-ago quarterly figures, and all-in sustaining costs fo the quarter fell to just under $850 per ounce. Even though adjusted earnings more than tripled year-ago levels, a massive $225 million impairment charge reflected the impact of falling gold prices on the company. Moreover, with gold prices taking a huge hit after the Fed's announcement earlier today, even optimistic production guidance and cost savings might not be enough to make Lake Shore Gold a growth candidate in the near-term.