The market's rolling again, but more than a few stocks are getting left behind. As strong as last week's rally was, there were still more than 400 exchange-listed stocks hitting fresh 52-week lows last week.
Rite Aid (NYSE: RAD), Dave & Buster's (NASDAQ: PLAY), and The Meet Group (NASDAQ: MEET) are among the hundreds of stocks tumbling to their lowest prices in more than a year. Let's dig a little deeper into these three stories to see how they lost the bulls along the way.
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It seemed as if there was going to be a storybook ending for Rite Aid a year ago. Plans were in place for the drugstore chain to combine with the much larger Albertsons, a year after antitrust regulators nixed a more lucrative buyout proposal.
Shareholders got in the way. Vocal institutional and retail investors began to complain that Rite Aid should be receiving a larger share of the combined company, despite being substantially smaller than Albertsons. The deal fell apart, and inevitably so did Rite Aid as a swinging single in a more complicated world. The stock broke below $1, leading to a 1-for-20 reverse stock split that has only made matters worse. Rite Aid's losses continue, and with a new all-time low on Wednesday, the stock has shed more than 75% of its value from when it seemed as if the deal with Albertsons would go through a year ago.
Dave & Buster's
The chain of big-box "eatertainment" establishments hit new lows after a rough quarterly report last week. Revenue and earnings grew in the high single digits, but that was still a miss on the top line. Comps also turned negative, reversing a positive showing last time out that had ended a streak of five consecutive negative reports. Same-restaurant sales have now declined in six of the past seven quarters.
Guidance was even worse. Dave & Buster's now sees revenue for the fiscal year clocking in between $1.365 billion and $1.39 billion, with comps checking in between a decline of 1.5% to a gain of 0.5%, lower than its earlier outlook on both counts. Several analysts followed by either downgrading the stock or slashing their price targets.
The Meet Group
There's nothing more important for a social media site as privacy and security, and last week The Meet Group came under fire. Noted worrywart The Friendly Bear skewered the social discovery specialist last week, calling out pressure points of a model that's relying more and more on tips for live video performances for its MeetMe and Skout sites.
Live video can be a slippery slope. The Meet Group prefers to point out how viewer tips on real-time streams are inspiring popular personalities to engage with users on the platform. MeetMe's Battles function lets two streaming accounts face off against one another in lip sync, dancing, or joke-telling competitions. However, there can also be a dark underbelly to live videos with tip incentives, and that's where lewd if not predatory behavior can creep into the platform. The Meet Group responded to the Friday morning bearish attack by pointing out how far it's gone to keep its platforms safe. Now it's up to investors to decide which side will win this real-time "Battle" for support.
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