Wall Street had a calm day on Friday, with trading activity at muted levels due to the Veterans Day holiday and a general lack of market-moving news. Developments in Washington over tax reform continue as lawmakers attempt to reach consensus on a slate of proposals that can get enough support to get through a deeply divided Congress, but favorable economic conditions are keeping investors from being too nervous about the prospects for meaningful tax cuts to take effect in 2018. Even so, some individual companies suffered from bad news that sent their shares lower. Frontier Communications (NASDAQ: FTR), Trade Desk (NASDAQ: TTD), and Whiting Petroleum (NYSE: WLL) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Frontier can't connect
Shares of Frontier Communications plunged 15% after earning negative comments from stock analysts at a major financial company. Bank of America Merrill Lynch made a huge reduction in its price target for the telecom company's stock, cutting it from $19 all the way to $4 per share. The analyst referred to Frontier's current dividend, which works out to more than a 30% yield and in many investors' view is unsustainable. Frontier stock has moved steadily downward since the company's latest acquisition of assets from Verizon failed to produce the unqualified success that many had hoped, and at this point, it will need to work very hard and see some good fortune in order to extricate shareholders from their current predicament.
Trade Desk falls off the table
Trade Desk stock finished down 14% in the wake of the company's third-quarter financial report. At first glance, the programmatic advertising company seemed to put up solid performance, including a 50% jump in revenue and a gain of more than 60% in adjusted net income. Yet even though Trade Desk enjoyed even better gains in key markets including France, Germany, Indonesia, and Korea, the company's full-year outlook was relatively disappointing. Investors can look for Trade Desk to keep growing nicely in the future, but the pace of that growth might not live up to high expectations that have driven the stock dramatically upward so far in 2017.
Whiting Petroleum stays volatile after reverse split
Finally, shares of Whiting Petroleum dropped 8%. Investors have seen shares of the oil and natural gas exploration and production company move sharply in both directions recently, reflecting the rapidly changing environment in the energy sector as well as Whiting's own particular asset performance. Yet one move that some investors might have seen as pessimistic involves Whiting's decision to finalize a 1-for-4 reverse split earlier this week. Often, companies do reverse splits when they're having problems, and investors have considerable experience with situations in which reverse splits were precursors to further financial stress. This doesn't appear to be the case with Whiting, and as long as recent difficult conditions in the energy sector give way to better prices for oil and natural gas, the company could prove to be one of the few positive examples of a reverse split going well.
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