Stocks rose on Tuesday morning, but drifted lower in the afternoon. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) still managed to close with moderate gains.
Today's stock market
Energy stocks climbed as the price of oil approached $60, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP) rising 2.1%. Bank stocks recovered after long-term interest rates stabilized; the SPDR S&P Regional Banking ETF (NYSEMKT: KRE) closed up 2.5%.
As for individual stocks, activist investors are seeking to replace the leadership of struggling retailer Bed Bath & Beyond (NASDAQ: BBBY), and marijuana producer Cronos Group (NASDAQ: CRON) reported fourth-quarter results.
Activists seek changes at Bed Bath & Beyond
Shares of Bed Bath & Beyond soared 22% after a group of activist investors announced it's launching a proxy fight to replace the entire board of directors and CEO Steven Tamares. The investor group -- which includes activist funds Legion Partners Asset Management, Macellum Advisors GP, and Ancora Advisors -- own 5% of the company's outstanding shares.
The press release by the investor group cites the fact that the company's stock has lost over 80% of its value since early 2015, and says that the current board has failed to adapt the business to a changing retail landscape and has not given proper oversight to the management team due to "a lack of retail expertise and stale perspectives."
Bed Bath & Beyond released its own statement in response, saying the struggling company has held discussions with the group, and "welcomes constructive input," but that "many of the areas highlighted by the Activist Group in its press release are already being addressed at a detailed level by the Company."
Cronos misses sales estimates
Canadian marijuana specialist Cronos Group reported fiscal fourth-quarter results that missed expectations for sales and shares initially fell 6%, but recovered to close down 1.4%. Revenue of 5.6 million Canadian dollars was a big increase from CA$1.6 million in the period a year ago, but missed analyst estimates of CA$8.93 million. Cronos attributed the increase to sales of recreational marijuana in Canada and growth in revenue from cannabis oil.
Cronos sold 775 kilograms of dried cannabis in the quarter, up from 397 kilos the quarter before, and sold 265 kilograms of cannabis oil, compared with 117 kilos in Q3. Prices fell, with dry cannabis selling for an average price of CA$5.45 per gram, down from CA$6.60 last quarter. The price of cannabis oil plummeted from CA$9.17 per gram in Q3 to CA$5.08 in Q4.
Cronos said its focus will be on the whole value chain, rather than on just increasing capacity. "Our business model is not to be the farmer," said CEO Mike Gorenstein in the conference call. "You can expect our focus to be on making the cheese, rather than on raising and milking the cow."
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