Six downtrodden stocks made our "stock market crasher" list today (Wednesday).
And what's behind their respective sell-offs can be divided into just two groups: deals gone sour and earnings gone wrong…
Stock Market Crasher Group #1: Deals Gone Sour
The Walgreen Co.: WAG stock was down 14.29% to $59.24 a share on Wednesday close on news that the company exercised its option to buy the remaining 55% of Alliance Boots, but elected to keep WAG corporate headquarters in the United States. Alliance is a multinational pharmacy with a presence in over 25 countries. Together, the two companies will become Walgreens Boots Alliance on completion of the $15.26 billion deal.
Today's decision followed months of speculation over whether Walgreen would invert and relocate to the UK. In July, U.S. President Barack Obama began heavily blasting corporate culture and tax incentives that drive U.S. firms abroad (we explain everything you need to know about the basics of tax inversion deals here). Resolution to remain HQ'd in Chicago had a lot to do with public shaming – WAG Chief Executive Officer Greg Wasson cited the "harder to quantify" but equally significant risk of "consumer backlash and political ramifications, including the risk to our government book of business."
So, Walgreens will not become the next of the 47 U.S. companies that have undergone inversion in the past decade, according to the Congressional Research Service. And of that, investors disapproved by way of market reaction today.
Time Warner Inc.: TWX stock dipped 12.85% to trade at $74.22 today, all on a two-sentence note from business magnate and Twenty-First Century Fox Inc. (NYSE: FOXA) CEO Rupert Murdoch:
"On behalf of our board and senior management team, I am writing to inform you that we are withdrawing our offer to acquire Time Warner, effective immediately.
Sincerely, Rupert Murdoch."
Murdock coveted Time Warner's hot property HBO, which he aimed to convert into a digital product to compete directly against online streaming giant Netflix Inc. (Nasdaq: NFLX). But he ultimately backed off due to negative shareholder response, and to Time Warner's apparent hostility toward the deal. The $150 billion union would've been the biggest media merger in a decade.