Six Major Blowups of the Week: Chegg, Cisco, NII, Rackspace and More

Sometimes a major bull market just does not help some companies. Bad things can happen in good times. 24/7 Wall St. tracked some of the unusual disappointments from this last week and wanted to create a rogues gallery for its readers.

The hope is that some of these can get their acts together and recover. After all, investors love turnarounds. The problem is that not all turnarounds can turn around. Some industries change, and sometimes there are just shenanigans inside of companies.

These are the six seriously troubled companies we tracked this week. There were others that had atrocious weeks as well, but these were the ones we had some opinion on or had some insight to offer.

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Chegg, Inc. (CHGG) was the IPO disappointment of the week. Sure it has a lot of competition, but IPOs are supposed to be on fire now. Chegg managed to gain almost 3% on Friday to close at $9.13, but one must remember that the IPO price at $12.50 never saw the $12.50 open. The stock opened at $9.80 and closed at $8.88 on the first day, a move which will baffle IPO investors of growth companies who are buying an IPO at a time when major indexes are hitting new all-time highs. By the way, GSV Capital Corp. (GSVC) was a runner-up loser along with Chegg, as this fund owned shares of Twitter and Chegg pre-IPO. The stock price was above $16 before the Twitter IPO and is now down to $12.03 after another 8.8% drop on Friday. Bye-bye.

Cisco Systems Inc. (CSCO) was the biggest blowup of the week. Sure, other stocks had much larger percentage drops, but not among DJIA components. Its earnings blunder and guidance seem to be magnified by China and international companies pushing back over technology that may be allowing US spy agencies better access into data. All in all it was a huge disappointment. We tracked many analysts cutting their ratings after the report and the expected price target in a year fell by about 10%. John Chambers now has to rethink his turnaround and restructuring plan. Cisco managed a gain of less than 1% on Friday to $21.53, but this still closed down 10.3% from before the earnings report.

NII Holdings Inc. (NIHD) is trading as though the worst case scenario is headed its way. This is effective Nextel international, and the closure of its communications sites in Mexico sale did not seem to help matters. That call from a week earlier where HSBC abandoned ship after NII reported a wider loss, predicting that the stock would now go to $2.00 per share, is looking like that could be possible. This one fell another 8.6% to $2.63 on Friday on about 200% of normal volume, and the stock put in a new low over the last decade or so of $2.60 with wide losses expected in 2013 and 2014 on declining sales. Timber!