Thursday's Headlines: DocuSign to Layoff 9% of Staff

Thursday's Headlines: DocuSign to Layoff 9% of Staff

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

2U (TWOU) +13.9%

Chegg (CHGG) +10.6%

Netflix (NFLX) +9.3%

BlackLine (BL) +8.2%

StoneCo (STNE) +7.8%

Moving Down ⬇️

Apple (AAPL) -1.3%

Align Technology (ALGN) -1.0%

PagerDuty (PD) -0.6%

Hasbro (HAS) -0.1%

Zendesk (ZEN) +0.1%

Here are the stories that you need to know ahead of market-open today, Thursday the 29th of September.

DocuSign to Layoff 9% of Staff 😰

DocuSign (DOCU) has become the latest tech company to announce significant layoffs as part of a major restructuring plan. The company announced on Wednesday that it would cut its workforce by 9% in an effort to improve margins. DocuSign had roughly 7,400 employees at the start of the year.

Shares rose 5% on the news with investors eager to see high-growth companies take a more measured approach to costs in the light of inflationary pressures. Management said it expects to incur restructuring charges of between $30 and $40 million and should have the move completed by the end of the fiscal year 2023.

DocuSign’s solutions allow companies to electronically sign and transfer important documents — a function that was critical during the pandemic. However, demand for the software has waned in recent months and the company has faced stiff competition from bigger players like Adobe.

Earlier this month, shares of the company soared after management announced quarterly results that topped expectations and gave a rosy outlook for the remainder of the year. However, shares are still down 65% year-to-date following a rout in high-growth technology stocks.

In June, CEO Daniel Springer stepped down from the top job and was replaced by former Alphabet executive Allan Tyghesen.

Several major technology companies have announced layoffs over the past few months, including UiPath, PayPal (PYPL), and Coinbase.

The Home Depot Anticipates Hurricane Surge ⛈

Shares in big-box home improvement retailers like The Home Depot (HD) and Lowe’s were up yesterday as investors anticipate increased business amidst the fallout from Hurricane Ian.

Making landfall in Florida yesterday, Hurricane Ian is expected to be one of the most powerful storms in U.S. history, with many coastal communities already flooded and millions of dollars of damage caused.

Though most stores and businesses in the region are closed, companies like The Home Depot have historically seen increases in business and share price alongside these events. In 2018, for example, Hurricane Isaac contributed sales of $377 million to The Home Depot’s top line as clean-up and repair work took place in Louisiana.

Now, with some analysts estimating that the damage from Hurricane Ian could exceed $250 billion in a worst-case scenario, investors are expecting places like The Home Depot to play a major role in recovery from the storm.

2022 has been a tricky year for The Home Depot to date, with its stock price down some 30% since the start of the year. More recently, cooling demand in the housing market has affected the company’s stock, with many investors equating its business performance to construction and renovation activity.

Biogen Soars on Alzheimer’s Breakthrough 🧬

Shares in American biotechnology company Biogen skyrocketed by almost 40% yesterday following news of positive results emanating from a large-scale study on its experimental Alzheimer’s medication.

The experimental drug is being manufactured by Biogen in conjunction with Japanese pharmaceutical company Eisai Co Ltd. So far, it’s been able to slow the cognitive and functional decline typically associated with Alzheimer’s by roughly 27% when compared to a placebo. In a field where progress is painfully slow and most drugs fail, this small win offers huge hope to millions worldwide who could potentially benefit from the medication.

This marks such a significant breakthrough in the field that shares of one of Biogen’s chief competitors — Eli Lilly — also rose as they are currently developing their own Alzheimer's drug

Biogen is based out of Cambridge, Massachusetts, and specializes in developing and distributing a number of treatments for neurological diseases. It was founded in 1978 but didn’t go public until 1991 in a bid to alleviate financial pressures being faced. Fast forward to today and Biogen is a $40 billion dollar company with a reach that spans the entire globe.

Prior to yesterday’s stock surge, the firm had been down close to 20% on the year so far. This just goes to show how volatile pharmaceutical stocks can be. It’s rare to see companies of this size get such significant boosts, but pharma companies certainly buck that trend. Conversely, however, they can also plummet just as quickly should a trial go wrong or results be weaker than expected.

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