- Worries about regulation have swirled lately around both Big Tech and Chinese stocks. These conspired to drag down a specific segment of the Chinese tech market on Monday, as China-based electric vehicle stocks took a tumble. XPeng Inc., Li Auto and NIO Inc. all lost ground.
- Meanwhile, ESSA Pharma suffered one of the day's biggest sell-offs, losing more than a third of its value during the session. The decline came after the company delayed the timeline for releasing key clinical trial data.
- Mister Car Wash, Inc. also lost ground on the session, adding to an earnings-inspired slide that began last week. With the retreat, the stock posted its lowest close since coming public in June.
- On the other side of the ledger, Collegium Pharmaceutical was one of the day's biggest gainers. The announcement of a stock repurchase halted a losing streak and allowed COLL to regain some of its recent losses.
- Another notable advance came from Headhunter Group PLC. Thanks to strong quarterly figures, the stock set a new 52-week high.
Sector In Focus
- Tightening regulatory pressure has been a theme over the last several months. In the U.S., authorities have eyed Big Tech for signs of antitrust activities. In China, the government has engaged in a well-publicized crackdown on U.S.-listed stocks.
- Monday saw these trends converge, leading to a decline in shares of China-based electric vehicle companies.
- First, Elon Musk's Tesla Motors fell under the gaze of U.S. regulators. The National Highway Traffic Safety Administration has launched a probe of accidents involving the autopilot on the firm's vehicles.
- Second, there were more rumblings out of Beijing. These focused specifically on the representation of history in online games. However, investors got nervous about the general direction of global regulatory policy.
- As a result, there was a notable sell-off in China-based EV stocks. This included a sharp slide in XPEV, which fell nearly 7% on the day. NIO dropped nearly 6%, while LI slipped 3.5%.
Standout Gainer
- In early August, Collegium Pharmaceutical (COLL) reported its quarterly report. Earnings beat expectations, but investors focused on weakness in the top line, where revenue growth of just over 6% came in below analysts' projections.
- Shares plunged on the news and added to their losses in the next several sessions.
- Going into Monday's trading, COLL had finished lower in eight consecutive sessions, falling from a close of $25.25 on August 3 to a finish at $17.75 on August 13. This represented a decline of about 30% over the losing streak.
- COLL bounced back on Monday. The announcement of a $100M stock repurchase program served as a catalyst for a gain of almost 15%.
Standout Loser
- ESSA Pharma (EPIX) plunged on Monday after releasing its quarterly update, which included a disappointing data-release schedule for one of its key products in development.
- The pre-revenue experimental pharma company announced tame financial figures, revealing a loss for the quarter amid spending on its development program. The firm also said it had a sufficient cash runway into 2024.
- However, the firm also presented a delayed timetable to provide data from an early-stage trial of its EPI-7386 drug candidate in prostate cancer.
- EPIX declined more than 34% on the session to finish at $7.81. This marked its lowest close since December.
- The stock had touched a 52-week high of $36 in May. Shares are now 78% off that peak.
Notable New High
- Online recruitment firm HeadHunter Group (HHR) announced a quarterly profit that topped expectations. This came as revenue jumped nearly 146% to $54M, also exceeding the estimates of market analysts.
- Bolstered by the earnings news, HHR advanced nearly 4% to finish at $50.23. This was the stock's first-ever close above $50.
Notable New Low
- Last Friday, Mister Car Wash, Inc. (MCW) endured a significant retreat, despite the release of better-than-expected quarterly results. This was the first quarterly report since the company came public in June.
- The decline continued on Monday. Shares slipped about 6% on the session, closing at $18.39.
- MCW came public in June in an IPO priced at $15. Shares posted a massive advance in the first session, finishing at $20.30 in its debut.
- Later gains allowed the stock to reach a high of $24.49 in late July, but the momentum has been to the downside lately.
- With Monday's retreat, MCW remains above the $15/share IPO price but has come 25% off its high.
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