Why Acacia Communications, Scientific Games, and Chesapeake Energy Jumped Today

Image source: Acacia Communications.

The back-and-forth tug of war continued Wednesday on Wall Street, and the stock market recovered most of its losses from yesterday. The Dow finished up triple digits, and other major market benchmarks rose around half a percent as investor concerns about the health of the global financial system waned. The SPDR Select Financials ETF (NYSEMKT: XLF) climbed more than 1.6%, and emerging markets also performed well, pushing the iShares MSCI Emerging Market ETF (NYSEMKT: EEM) up almost 1.5%. Oil prices also rose slightly, helping to stoke interest in that sector of the market. Even though the broader market's gains were modest, some stocks posted much more significant advances. Among the best performers on the day were Acacia Communications (NASDAQ: ACIA), Scientific Games (NASDAQ: SGMS), and Chesapeake Energy (NYSE: CHK).

Acacia boosts its outlook

Acacia Communications jumped 11% after the fiber optics company boosted its guidance for its third quarter results. The company said that it believes its sales for the quarter will be between $130 million and $133 million, and that should produce between $0.83 and $0.90 per share in adjusted earnings. Both figures were far higher than Acacia's previous guidance, and they also exceeded the expectations that most investors following the stock had for its results. Given that the fiber optic provider had already raised its guidance once, investors were especially happy with how Acacia is performing in an important growth sector of the economy.

Scientific Games makes a buy

Scientific Games gained 6% in the wake of its announcement that it had purchased the interactive games portfolio of Karma Gaming. The release today said that the purchase had actually taken place in June, but Scientific Games said that the move will help the combined company move more aggressively to adapt state lotteries to meet the needs of a digital world. In particular, Karma has offered instant-gaming options electronically as well as second-chance games connected to traditional lottery sales. With Karma doing business in Canada, Italy, and the U.S., Scientific Games will have the opportunity to cement its leadership position in the lottery space and potentially take advantage of new research and development opportunities to grow its business.

Chesapeake gets stronger

Finally, Chesapeake Energy climbed 7%. The energy company issued an update on its efforts to make changes to its capital structure. Through a combination of convertible debt offerings and exchange agreements involving common and convertible preferred stock, Chesapeake has given itself more flexibility in managing its assets, and in particular, the opportunity to exchange debt for equity could dramatically improve Chesapeake's balance sheet within the next few years. CEO Doug Lawler said that the moves "represent major steps toward reaching our financial goals of $2 billion to $3 billion of debt reduction," and investors appear to agree that combined with cost-cutting measures, Chesapeake's efforts have boosted its prospects going forward.

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