Why Starbucks, Roku, and Universal Display Slumped Today
The stock market gave up ground on Tuesday as market participants processed the news that National Security Advisor John Bolton had been fired, and dealt with the rotation away from momentum stocks toward more value-priced issues. In addition, some bad news for well-known individual companies had a negative impact on market sentiment. Starbucks (NASDAQ: SBUX), Roku (NASDAQ: ROKU), and Universal Display (NASDAQ: OLED) were among the day's worst performers. Here's why those stocks did so poorly.
Shares of Starbucks were down almost 5% after reports that the U.S. Securities and Exchange Commission has made inquiries about the coffee giant. In particular, The Wall Street Journal reported that the SEC wants Starbucks to explain exactly how the company's accounting practices measure incoming revenue. However, more than 200 companies have gotten similar inquiries about the revenue recognition practices over the past couple of years, and Starbucks doesn't believe that there will be any further exchange of information necessary between it and the SEC on the matter. With some investors fretting about earnings growth, Starbucks can't afford to let a controversy derail its long-term strategy.
Image source: Starbucks.
Source Fool.com
