Why Aphria, Weatherford International, and Opko Health Jumped Today
The stock market's recovery petered out on Friday, as major indexes generally eased lower by a fraction of a percentage point. With many market participants out for the holiday week, movements in stocks were choppy, with the Dow Jones Industrial Average seeing losses of as much as 150 points and gains of nearly 250 points at times during the day. Good news sent some stocks higher, though, and Aphria (NYSE: APHA), Weatherford International (NYSE: WFT), and Opko Health (NASDAQ: OPK) were among the best performers. Here's why they did so well.
Aphria has a suitor
Shares of Aphria finished up 12% after the cannabis company got an unsolicited takeover bid from a fellow industry player in the U.S. market. Late Thursday, Ohio-based Green Growth Brands announced that it intended to offer 11 Canadian dollars per share for Aphria in an all-stock deal, with investors getting 1.5714 shares of Green Growth for every Aphria share they own. That works out to about a $2.1 billion valuation, but Aphria's board was quick to criticize the proposal. Board chair Irwin Simon said that the proposal "significantly undervalues the company" and "is quite risky, given [Green Growth's] condition to complete a brokered financing at a price that is more than double the recent average of [its] share price." With other deals taking place at higher valuations, many Aphria shareholders are happy that the cannabis company's holding out for more.
Weatherford gets its energy back
Weatherford International saw its stock soar 25%, adding to its massive gains earlier in the week. The energy company's rebound paled in comparison to its plunge over the past several months, however, which took its share price down more than 90% between early October and Monday's market lows. Plummeting oil prices were largely responsible for the stock's decline, and now that crude has finally seemed to reach a short-term bottom, investors seem more comfortable. Yet Weatherford recently got a delisting notice from the New York Stock Exchange, and unless it can produce a gain of nearly 150% from current levels, aggressive action like a reverse stock split will be necessary to keep Weatherford's stock trading on a major exchange.
Opko makes a deal
Finally, shares of Opko Health jumped 25%. The beleaguered biotech company agreed to settle litigation with the U.S. Securities and Exchange Commission, which had alleged that CEO Phillip Frost and others had worked to manipulate prices of certain stocks. Under the deal, Opko will pay a $100,000 penalty to the SEC, while Frost will pay $5.5 million in penalties and profit disgorgement. Frost will be allowed to remain as CEO, and investors hope that the settlement will put a troubling incident behind them and allow everyone to focus on Opko's potential for fundamental growth.
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