Why Shopify, Momenta Pharmaceuticals, and MBIA Slumped Today
The stock market saw new highs on Wednesday, even though gains for most major benchmarks were extremely small. Investors are trying to balance their enthusiasm about the U.S. economy and potential future benefits for corporations whose stock they own against the possibility that the stock market's valuation is getting overextended. Oil prices also fell below the $50-per-barrel level, causing some nervousness that the energy market's recent recovery could reverse itself. Some individual companies had to deal with substantial downward pressure on their share prices, and Shopify (NYSE: SHOP), Momenta Pharmaceuticals (NASDAQ: MNTA), and MBIA (NYSE: MBI) 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.
Shares of Shopify dropped more than 11.5% after famed short-selling analyst company Citron Research targeted the website and e-commerce specialist. Citron analyst Andrew Left suggested that Spotify's share price would be more appropriate at $60 per share, or roughly half where it started the day. Citron alleged that Shopify's business model relies on promotion of get-rich-quick themes, but Shopify has focused investor attention on the quality of its e-commerce platform. The stock has undoubtedly climbed dramatically, having doubled in price since the beginning of 2017, but many bullish investors still see plenty of upward potential for Shopify going forward.
Image source: Shopify.
Source: Fool.com
