The stock market didn’t see much volatility on Friday, with most major benchmarks finishing the session very close to where they had started. Without much in the way of market-moving news on the national or global front, most investors instead paid attention to the cross-currents involved with monthly options expirations. Some other parts of the financial markets were more interesting, with bond yields easing a bit lower after their big upward push earlier in the week and oil prices taking a break from their recent surge. Yet some individual companies suffered from bad news that sent their shares lower. Baidu (NASDAQ:BIDU), GameStop (NYSE:GME), and Opko Health (NASDAQ:OPK) were among the worst performers on the day. Here’s why they did so poorly.
Baidu deals with a key departure
Shares of Baidu dropped 9.5% after the Chinese internet giant said that its chief operating officer would leave the company. COO Qi Lu had only worked at Baidu for just over a year, but he had taken a key leadership role in driving the Chinese company’s artificial intelligence efforts. In a statement, he said that he would no longer be able to work in China “due to personal and family reasons.” Baidu promoted another executive to take the departing COO’s place, but even though Qi Lu will remain as vice chair of Baidu’s board, investors worry that a transition could cost Baidu valuable time in its AI efforts and could put it at a competitive disadvantage at a critical point in the industry’s evolution.
Image source: Baidu.
GameStop can’t get analyst love
GameStop stock fell 9% as the video game and console retailer got negative comments from analysts. Professionals at Bank of America/Merrill Lynch repeated their previous guidance on GameStop, including its underperform rating and price target of $10 per share, another 20% below the stock’s current price. The retailer suffered from weak sales figures during the month of April, and GameStop has had trouble dealing with the video game industry’s transition away from retail intermediaries toward direct digital distribution. Without a meaningful change to its core business model, GameStop could find it difficult to remain competitive, let alone restore past levels of growth.
Opko can’t get paid
Finally, shares of Opko Health plunged 18%. The company said that its 4Kscore prostate cancer diagnosis test is in danger of not qualifying for reimbursement under Medicare. That could be devastating for Opko, which sees the test as offering a chance for blockbuster sales results over time. Already, Opko has had to deal with other challenges related to the product, including slow rates of adoption commercially. Yet if Opko can’t successfully fight back to get Medicare to cover 4Kscore for reimbursement, then the resulting blow could be even bigger. With a complicated path forward, many investors aren’t banking on Opko being able to rescue itself from a tough situation.