The stock market was mixed Friday, showing once again a big disparity across different market benchmarks. Both the S&P 500 (SNPINDEX:^GSPC) and the Dow Jones Industrial Average (DJINDICES:^DJI) posted gains and reached new all-time highs. Yet the Nasdaq Composite (NASDAQINDEX:^IXIC) lost ground, though it finished the day well above its worst levels.
Index | Percentage Change | Point Change |
---|---|---|
Dow | 0.90% | 293 |
S&P 500 | 0.10% | 4 |
Nasdaq Composite | (0.59%) | (79) |
There’s been a lot of hype in the market for initial public offerings (IPOs) for months, and many recent IPO stocks have soared. Yet in the past few weeks, many of those former highfliers have fallen back to earth. On Friday, three IPO stocks in particular took big hits for a variety of reasons.
Hitting the brakes
Shares of electric vehicle upstart Lordstown Motors (NASDAQ:RIDE) fell 17% Friday. The company was the latest target of a well-known research firm that looks at companies it believes are good candidates for short-selling.
Hindenburg Research has put other companies in the EV industry under its microscope, most notably Nikola (NASDAQ:NKLA). Friday’s Hindenburg report on Lordstown made a series of allegations, calling the company’s 100,000 pre-orders for its Endurance pickup truck “largely fictitious” and asserting that many sizable fleet orders were made by entities without the capacity to pay for the vehicles. Hindenburg has also talked with former Lordstown employees who say that the automaker isn’t as close to production as management has indicated, suggesting that it’s unlikely to meet its goal of starting production in September.
Investors are clearly taking the allegations seriously. Given what happened with Nikola, Lordstown finds itself in the uncomfortable position of having to prove itself. If it can’t, then there could be more downside for this company, which just went public through a SPAC merger last October.
Looking ragged
Poshmark (NASDAQ:POSH) was also hit hard Friday, as its shares fell 20%. The high-end secondhand clothing retailer’s fourth-quarter financial results weren’t as strong as investors who bought into its January IPO had hoped.
Poshmark did show growth, with gross merchandise value rising 28% year over year and a 27% boost to revenue. The company eked out an adjusted profit of $0.05 per share for the quarter. For the full year, sales were up 28% and earnings came in at $1.25 per share on an adjusted basis. However, investors weren’t happy with Poshmark’s sales outlook, which was about 3% to 6% lower than they had expected to see.
Poshmark’s business model appears appealing to many shoppers. However, it’ll need to prove its ability to operate efficiently before the stock can start to regain some of the…
Read More: Despite More Stock Market Records, These 3 IPO Stocks Got Crushed Friday