Why Hanesbrands, Salesforce, ArcelorMittal, Lions Gate & Splunk Are Plummeting Today

The markets are back to tumbling on Friday, along with oil, as dozens of stocks have seen major decreases on high trading volume. All major U.S stock indexes were trading down in the early afternoon, partly driven by the declines in the shares of Hanesbrands Inc. (NYSE:HBI), salesforce.com, inc. (NYSE:CRM), ArcelorMittal SA (ADR) (NYSE:MT), Lions Gate Entertainment Corp. (USA) (NYSE:LGF), and Splunk Inc (NASDAQ:SPLK), which have registered considerable losses during the trading session. Let’s take a look into the events behind said declines, as well as into what the hedge funds in our database think about these companies.

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Back to the stocks that interest us, we’ll start with Hanesbrands Inc. (NYSE:HBI), down by more than 14% today after the company announced its fourth quarter financial results. After the market closed on Thursday, the manufacturer and marketer of apparel reported earnings of $0.44 per share on revenue of $1.41 billion, missing the Street’s consensus of $0.46 per share in earnings and $1.53 billion in revenue.

A hedge fund that is probably not happy with the news is John Shapiro’s Chieftain Capital, which disclosed ownership of 9.2 million shares of Hanesbrands Inc. (NYSE:HBI) as of the end of the third quarter of 2015. The stake accounted for more than 3.2% of the company’s total shares, and made Chieftain the largest hedge fund shareholder of record in our database as of September 30.

Next up is salesforce.com, inc. (NYSE:CRM), down by about 12% in the early afternoon. It seems like the decline was prompted by the lukewarm results and weak guidance issued by Tableau Software Inc (NYSE:DATA) and LinkedIn Corp (NYSE:LNKD) on Thursday evening, which sent several major tech stocks crashing.

Probably happy about his decision to exit a position in salesforce.com, inc. (NYSE:CRM) is Philippe Laffont. His fund, Coatue Management declared having sold all of its 557,922 shares of the company during the third quarter, closing out its stake.

On the next page we will take a look at the reasons behind the tumbles seen at ArcelorMittal SA (ADR) (NYSE:MT), Lions Gate Entertainment Corp. (USA) (NYSE:LGF), and Splunk Inc (NASDAQ:SPLK).

ArcelorMittal SA (ADR) (NYSE:MT) is trading down by more than 10% on Friday afternoon, after the company announced its plans to issue $3 billion in stock to help trim its debt and costs, as it absorbs the impact of lower steel prices. Also driving the decline in ArcelorMittal SA (ADR) (NYSE:MT)’s stock was the announcement of the sale of the company’s minority stake in Gestamp, worth about $1 billion.

“This capital raise, combined with the sale of our minority shareholding in Gestamp, will accelerate the company’s debt reduction plans and enable us to reduce net debt to less than US$12 billion. This will help ensure that the business is resilient in any market environment and puts ArcelorMittal in a position of strength from which to further improve performance,” Lakshmi Mittal, the company’s chairman and CEO explained in a press release issued Friday.

One of the largest declines on Friday is Lions Gate Entertainment Corp. (USA) (NYSE:LGF), down by more than 33% after the company missed earnings and revenue estimates on Thursday evening. The entertainment firm posted EPS of $0.45 on revenue of $670.52 million, well below the Street’s consensus of $0.48 and $781 million respectively. Also disappointing were the figures for The Hunger Games: Mockingjay Part 2, which underperformed Lions Gate’s own expectations by about $100 million in profit, as well as the lack of a guidance update.

Possibly anticipating the poor results, Mark Rachesky’s MHR Fund Management, the largest hedge fund shareholder of the stock in our database, disclosed on November 13 that it made a substantial reduction to its holding of Lions Gate Entertainment Corp. (USA) (NYSE:LGF), cutting its stake from 40.21 million shares to 30.26 million shares.

Finally, there’s Splunk Inc (NASDAQ:SPLK), down by roughly 22% in Friday trading, also driven by Tableau Software Inc (NYSE:DATA)’s earnings call.

Negative news aside, Christopher Lord’s Criterion Capital seemed quite bullish on Splunk Inc (NASDAQ:SPLK) a few months ago. By the end of the third quarter of 2015, the fund declared holding 1.67 million shares of the company, or more than $92 million in stock.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.