What Led To These Stocks Sinking Today?

Blucora Inc (NASDAQ:BCOR) is down by 15% in afternoon trading after the company announced that it will acquire HD Vest Financial Services for $580 million. Management pulled the trigger on the deal because they like HD Vest’s growth prospects, although investors aren’t as excited given the relatively high acquisition price and limited synergies between the companies. From the press release:

“On a pro forma basis, TaxACT and HD Vest are expected to generate 2015 revenue of $436.8 million and adjusted EBITDA of $86.5 million excluding synergies, which represent a 3-year compounded annual growth rate of 10 percent and 16 percent, respectively. The combination is expected to generate synergies with a $5 million contribution to EBITDA by 2017. This transaction provides Blucora with stable growth, increased visibility, and high cash flow generation.”

Lastly, Blackhawk Network Holdings Inc (NASDAQ:HAWK), a leading prepaid and payments global company, is down by 6.18% in afternoon trading after issuing fourth quarter revenue guidance of $365 million-to-$385 million, below analyst expectations of $398.4 million. Shares of the company are still up year-to-date however, and trade at 17.5 times forward earnings. ELite investors that we track were extremely bullish on Blackhawk during the second quarter, increasing their collective holdings by greater than four-times to $342 million, while the number of investors long Blackhawk rose to 27 from 21.

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