Why GNC Holdings, Inc. Stock Dropped Today
What happened
Shares of GNC Holdings Inc. (NYSE: GNC) fell as much as 12.4% early Friday, then partially recovered to trade down 8.4% as of 3:30 p.m. EST following the health and wellness retailer's comparatively massive pop on Thursday.
To be sure, GNC stock skyrocketed nearly 52% yesterday after the company announced better-than-expected preliminary fourth-quarter results. So more than anything, today's pullback appears to be the product of some investors taking their quick profits off the table.
IMAGE SOURCE: GNC HOLDINGS.
So what
I noted yesterday that the market's positive reaction to GNC's results seemed a tad "excessive" at first glance. But to be fair, the stock had also only just plunged nearly 70% in 2017, thanks to a combination of successive disappointing quarters, competitive worries from Amazon's (NASDAQ: AMZN) new vitamin line, and increasing concerns over GNC's liquidity.
According to CEO Ken Martindale, however, GNC's recent turnaround efforts "continued to gain momentum" last quarter. And the company promised that in 2018 it will continue to focus on improving its capital structure, driving international growth, and redesigning its e-commerce platform, among other initiatives designed to generate shareholder value.
Now what
In any case, GNC stock is still down around 48% over the past year, and it sits around 92% below its five-year high set in late 2013. So it's no surprise that bullish investors might carry high hopes for market-beating gains if the company can return to even a fraction of its former glory. But given GNC's meteoric rise yesterday, it's equally unsurprising to see shares pull back to end this week.
More From The Motley Fool
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
