Why GNC Holdings, Apogee Enterprises, and PG&E Slumped Today
Wall Street enjoyed a solid performance Thursday, as favorable gross domestic product data confirmed that the U.S. economy remains healthy. The Dow Jones Industrials flirted with new highs throughout the day, but closed with a more modest gain that fell shy of a record. Other major benchmark indexes saw similar-sized gains on a percentage basis. Yet despite the broadly positive mood among investors, company-specific news sent some businesses' share prices down sharply. GNC Holdings (NYSE: GNC), Apogee Enterprises (NASDAQ: APOG), and PG&E (NYSE: PCG) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
GNC Holdings dropped 24% after the nutritional supplements retailer announced a deal with a group of convertible bondholders to exchange outstanding debt for a combination of stock and cash. Under the deal, holders of convertible senior notes maturing in 2020 agreed to take 14.6 million shares of stock and about $500,000 in cash in exchange for almost $99 million in principal value of bonds. The move has the favorable impact of eliminating debt, but shareholders weren't happy about the newly issued stock that those creditors were receiving. With substantial debt remaining on GNC's books, investors appear concerned about future moves that could further dilute the value of its shares.
Image source: GNC Holdings.
Source: Fool.com
