The stock market closed the week with a substantial decline, as the Nasdaq Composite (NASDAQINDEX:^IXIC) led the broader market down with a drop of more than 2%. High-flying momentum stocks suffered the brunt of the damage in the market Friday, and that, in part, explains why Tesla Motors (NASDAQ:TSLA), Micron Technology (NASDAQ:MU), and Intercept Pharmaceuticals (NASDAQ:ICPT) were among the poorer-performing stocks today. Yet, each of those three stocks also had some negative news that shareholders had to overcome, as well.
Tesla fell 6%, as investors worried about several negative reports. The electric car company will no longer benefit from a California rebate to residents who buy its vehicles, and a study from TechnoMetrica found that consumer views of electric cars still suffer from concerns about driving range, recharge time and, most importantly for Tesla, sticker shock. In addition, California changed its rules on zero-emission vehicles, and the result will be to give Tesla fewer ZEV credits for each Model S sale. Given the role that those credits have played in Tesla's profitability, their removal could cause short-term hits to Tesla's financials.
Micron also dropped 6% after initially gaining after its earnings report last night. The memory-chip maker saw solid demand for memory, with Micron benefiting from the struggles of one of its competitors that saw a fire cause damage at one of its DRAM production facilities. Yet, after a run that has seen Micron stock almost double since last July, investors were apparently ready to take some profits on a tough day for the market on the whole. As long as demand for electronic devices remains high, Micron should continue to see good conditions in its memory market.
Intercept Pharmaceuticals declined almost 10% after hedge fund SAC Capital disclosed that it had sold off all but about 6,000 shares in the small biotech after having reported a previous position of almost 1.37 million shares. Given Intercept's soaring share price since December, SAC Capital likely reaped a huge profit on the position, and the hedge fund wasn't the only seller of shares. Also last night, Intercept priced its secondary offering of shares, with the company selling 600,000 shares, and outside institutional shareholders selling another 400,000. With somewhere between $180 million and $190 million in net proceeds from its part of the sale, Intercept should be able to go a long way toward developing its major candidates and getting them through clinical trials and regulatory review.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.