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Why Lending Tree, Glaukos, and Williams Companies Slumped Today

By Dan Caplinger – Jan 13, 2016 at 5:50PM

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The bottom fell out of the stock market Wednesday, and these companies led the way down. Find out why.


Image: Williams Companies.

After a one-day respite, stocks continued their 2016 march lower Wednesday. Losses accelerated after a report from the Federal Reserve pointed to mixed economic conditions across the nation, and by the end of the day, the Dow had lost 365 points and other major-market benchmarks were down between 2% and 4%. Even as concerns about a potential slowdown in the U.S. economy hit the broader market, Lending Tree (TREE -5.21%), Glaukos (GKOS -0.54%), and Williams Companies (WMB -1.14%) were among the worst performers among stocks.

Lending Tree plunged almost 30% despite its having said late Tuesday afternoon that its fourth-quarter and full-year results would exceed its previous guidance. The online loan-marketplace provider predicted that its revenue for the full 2015 year would be within a tight range around $253 million, up from a previous range of $244 million to $247 million. CEO Doug Lebda said that "both our mortgage and non-mortgage business continued to perform exceptionally well in the fourth quarter," despite what he called "a seasonally challenging period and despite market fears over rising interest rates." Yet the CEO attributed today's sell-off to the fact that the company didn't also boost its guidance for the 2016 fiscal year. Even though many expect mortgage rates to rise this year, Lending Tree remains confident that it can thrive in a rising-rate environment, but investors don't appear to be that optimistic.

Glaukos dropped 26% after providing disappointing guidance for its fourth quarter. The glaucoma-treatment specialist said that it expects fourth-quarter sales will come in around $20 million, which will bring full-year 2015 revenue up to $71.5 million. Glaukos expects further growth in 2016, with gains of 26%to 30% equating to a sales range of $90 million to $93 million. Those figures weren't inconsistent with what most investors following Glaukos had expected, but as the overall stock market starts to struggle, growth investors will generally become pickier about which stocks they keep in their portfolios. Moreover, the speculative pharma and biotech arena has taken hits recently on fears that regulation in the industry could affect profits for the long run.

Finally, Williams Companies dropped 18%. Crude oil had another tough day, dropping closer to the $30 per barrel level. Williams also faces some company-specific issues because investors are growing increasingly nervous that a proposed deal under which Energy Transfer Equity would acquire the energy infrastructure company. Energy Transfer Equity offered a deal for Williams in August that at the time was worth $43.50 per share, but share-price declines have made the stock portion worth considerably less than it did back then. Some actually think Williams should back away from the deal because of concerns about Energy Transfer Equity's ability to follow through on planned expansion strategies while maintaining distribution payments. As long as energy remains weak, problems like these will plague companies throughout the sector.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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Stocks Mentioned

The Williams Companies, Inc. Stock Quote
The Williams Companies, Inc.
WMB
$28.63 (-1.14%) $0.33
LendingTree, Inc. Stock Quote
LendingTree, Inc.
TREE
$23.86 (-5.21%) $-1.31
Glaukos Corporation Stock Quote
Glaukos Corporation
GKOS
$53.24 (-0.54%) $0.29

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

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