11 Stocks Failing to Keep up With The Market

Eleven stocks fell sharply on Tuesday, amid a flurry of negative developments that dampened investor appetite.

The stocks defied an overall market optimism, with Wall Street’s major indices all finishing in the green. The Dow Jones inched up by 0.18 percent, the S&P 500 increased by 0.41 percent, while the tech-heavy Nasdaq grew by 0.30 percent.

In this article, we focus on the 11 stocks that performed the worst on Tuesday and explore the reasons behind their declines.

To come up with the list, we focused exclusively on mid-cap stocks with more than $2 billion in market capitalization and 5 million shares in trading volume.

11. Ocular Therapeutix Inc. (NASDAQ:OCUL)

Ocular Therapeutix saw its share prices drop by 6.7 percent on Tuesday to close at $11.69 apiece as investors sold off positions after announcing plans to raise $475 million from a share sale.

In a statement, Ocular Therapeutix Inc. (NASDAQ:OCUL) said it would offer more than 37.9 million common shares at a price of $12.53 apiece until Wednesday, October 1, subject to customary closing conditions.

Ocular Therapeutix Inc. (NASDAQ:OCUL) said proceeds from the offer will be used to fund its planned open-label extension study for Axpaxli in patients with wet age-related macular degeneration (wet AMD), as well as the phase 3 clinical trials of the drug candidate for the treatment of non-proliferative diabetic retinopathy (NPDR).

The balance will be allocated for investments in infrastructure, including capital expenditures to support manufacturing, for pre-commercialization activities associated with Axpaxli, if approved, and other general corporate purposes.

10. Unity Software Inc. (NYSE:U)

Unity Software snapped a two-day winning streak on Tuesday, shedding 6.75 percent to close at $40.04 apiece as investors took path from a rating downgrade from an investment firm.

In a market note, HSBC revised its recommendation for Unity Software Inc. (NYSE:U) to “hold” from “buy” previously amid valuation concerns, having already jumped by nearly 100 percent year-to-date as compared with the S&P 100’s 15-percent gain.

“Growing investor confidence in the prospects of a successful turnaround in Unity’s operations under its new management has seen Unity’s share price +91% YTD (vs the S&P100 index +15%), now trading at c9.8x NTM sales, a 66% premium to its 2-year average, and implying an EV/26e sales multiple for its Grow segment of c9-12x,” HSBC said.

Albeit Unity Software Inc. (NYSE:U) was valued lower than its counterpart, AppLovin Corp., HSBC said that the latter has demonstrated a more superior growth and execution.

Despite the downgrade, HSBC still gave Unity Software Inc. (NYSE:U) a higher price target of $40.80 versus the $37.50 previously.