Ten companies lost their steam on Wednesday, bucking a wider market rally, as current news failed to spark investor excitement for their stocks.
On Wall Street, the Nasdaq increased by 0.94 percent, the S&P 500 grew by 0.61 percent, and the Dow Jones was up by 0.49 percent.
In this article, let us explore Wednesday’s 10 worst-performing mid-cap companies, alongside the reasons behind their drop.
To come up with the list, we considered only the stocks with at least $2 billion in market capitalization and over 5 million shares in trading volume.
10. MP Materials Corp. (NYSE:MP)
MP Materials dropped its share prices by 3.72 percent on Wednesday to end at $30.03 apiece as investors sold off positions following the recent stock rating downgrade from an investment firm.
In a market note, Jefferies downgraded its rating for MP Materials Corp.’s (NYSE:MP) stock to “hold” from “buy” previously, but raised its price target to $33 from $32 previously. The new figure marked a 9.9-percent upside from its latest closing price.
According to Jefferies, the downward revision was based on China’s decision to ease up on rare earth export restrictions for a short-term period after mounting calls from affected industries globally to loosen up.
Jefferies said the temporary easing would reduce the risk of near-term rare earth shortages in the market.
Investors of MP Materials Corp. (NYSE:MP) viewed China’s move in a negative light for as the exports easing could weaken its pricing power with higher supply and increased competition with Chinese counterparts.
9. Alibaba Group Holding Limited (NYSE:BABA)
Alibaba Group declined by 3.85 percent on Wednesday to end at $103.83 per share as investor sentiment was dampened by the cut-throat competition between the company and JD.com in servicing the expanding online market in China.
This followed JD.com’s pledge on Wednesday to allocate some 10 billion yuan ($1.4 billion) to support so-called benchmark brands across various categories amid the growing daily orders in China, reaching a new high of over 200 million.
The plan reflected JD.com’s efforts to dethrone Meituan as China’s top on-demand local delivery services provider, while also fending off competition from Alibaba Group Holding Limited (NYSE:BABA).
Earlier this month, Alibaba and Meituan went on a promotional war, flooding the market with discount coupons that allowed consumers to buy at unusually low prices.
The program was said to have pushed delivery riders to work on extended hours to meet the surging demand.
Meanwhile, Alibaba Group Holding Limited (NYSE:BABA) announced recently that it successfully raised HK$12 billion ($1.5 billion) through the issuance of a bond offer through 2032.
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