HPQ - Why HP Heron Therapeutics and Avnet Slumped Today
Major benchmarks generally did well on Friday, as investors were pleased to get good news on the employment front to help counter some of the weaker readings in economic data in recent days. After such a significant pullback in stocks, many market participants also seemed ready to have at least a short-term bounce. Yet for a few individual stocks, losses were unavoidable. HP (NYSE: HPQ), Heron Therapeutics (NASDAQ: HRTX), and Avnet (NASDAQ: AVT) were among the worst performers. Here's why they did so poorly.
Shares of HP fell nearly 10% after the tech giant announced that it would undergo a major restructuring. The strategic shift will involve 7,000 to 9,000 layoffs over the next few years, representing as much as 16% of its total workforce. HP believes that the move could save $1 billion annually by the end of fiscal 2022, but it'll cost the company about $1 billion, including $100 million in the coming fiscal fourth quarter of 2019 and $500 million in fiscal 2020. HP also authorized another $5 billion in stock repurchases, and incoming CEO Enrique Lores said that "we are taking bold and decisive actions as we embark on our next chapter." Investors don't appear so certain, and they seem to want to see proof of a turnaround before betting on the stock.
Image source: HP.