There’s never a shortage of losers in the stock market. Let’s take a closer look at five of this past week’s biggest sinkers.
| Company | Sept. 13 | Weekly Loss |
|---|---|---|
| Model N Inc (NYSE:MODN) | $9.98 | 32% |
| EZchip Semiconductor Ltd. (NASDAQ:EZCH) | $23.60 | 19% |
| Nanosphere, Inc. (NASDAQ:NSPH) | $1.84 | 12% |
| Glu Mobile Inc. (NASDAQ:GLUU) | $2.14 | 11% |
| Protalix BioTherapeutics Inc. (NYSEMKT:PLX) | $4.66 | 11% |
Source: Barron’s.
Let’s start with Model N Inc (NYSE:MODN). A couple of analysts downgraded the company after the company issued a disappointing outlook for the new fiscal year that begins next month. Model N Inc (NYSE:MODN) is forecasting revenue for the new fiscal year to clock in between $70 million and $80 million, well below Wall Street’s target of $118 million on the top line.
EZchip Semiconductor Ltd. (NASDAQ:EZCH) stumbled after its biggest customer introduced a new product. Cisco accounts for nearly 40% of EZchip Semiconductor Ltd. (NASDAQ:EZCH)’s business, and the market’s fear is that its new nPower chip will eat into its orders for EZchip’s networking chips. At least one analyst, Feltl & Co’s Jeffrey Schreiner, is standing by his bullish rating and $39 price target. He argues that EZchip Semiconductor Ltd. (NASDAQ:EZCH) has managed to stay relevant despite seemingly threatening new products by Cisco in the past.
Nanosphere, Inc. (NASDAQ:NSPH) stumbled after pricing a secondary offering at a steep discount. The molecular diagnostics company priced 15 million shares at $1.75 apiece on Friday, and that’s not what investors like to see when the stock had closed above $2 the day before. Nanosphere, Inc. (NASDAQ:NSPH) needs the money as it tries to gain traction with its gram-positive blood-culture test, but there’s no joy in secondary offerings when a stock is near its 52-week low.
Glu Mobile Inc. (NASDAQ:GLUU) also priced a secondary offering at a discount. The maker of smartphone and tablet games had to settle for a price of $2.10 for each of the new 6.3 million shares being issued. The stock was at $2.41 just before the news. Dilution is never a good thing, though Glu Mobile Inc. (NASDAQ:GLUU) should be able to turn that capital infusion around into the development of new apps.
Finally we have Protalix BioTherapeutics Inc. (NYSEMKT:PLX) sliding 11% on the week. The biotech exploring the commercialization of recombinant therapeutic proteins stumbled after raising $60 million through a convertible debt offering. The convertible nature of the financing means Protalix BioTherapeutics Inc. (NYSEMKT:PLX) was able get by offering a mere 4.5% in interest, but that also means buyers can convert the notes to stock at a 22% premium to where the shares were when the pricing was announced.
In short, that’s more dilution if Protalix BioTherapeutics Inc. (NYSEMKT:PLX) appreciates in the future.
Ready for a bounce
If you owned some of these losers, how about following the smart money into winners?
The article 5 of Last Week’s Biggest Losers originally appeared on Fool.com and is written by Rick Munarriz.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
