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Why Dicker Data, Medibank, Mesoblast, & Orora are dropping lower

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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to end the week on a positive note. In late morning trade the benchmark index is up 0.9% to 5,410.8 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Dicker Data Ltd (ASX: DDR) share price is down almost 1.5% to $7.08 after returning from its trading halt. This morning the wholesale distributor of computer hardware and software successfully completed a fully underwritten institutional placement to raise $50 million. Dicker Data raised the funds at $6.70 per share, which represents a 6.7% discount to its last close price. The proceeds will be used partly to fund the construction of Dicker Data’s new distribution centre.

The Medibank Private Ltd (ASX: MPL) share price is down 1.5% to $2.80. Earlier this week analysts at Goldman Sachs reiterated their sell rating and lifted the price target on this private health insurer’s shares slightly to $2.69. It remains bearish on Medibank due to the tough outlook the industry is facing from the softer economic backdrop and affordability issues.

The Mesoblast limited (ASX: MSB) share price has continued its slide and is down 3% to $3.44. Once again, this decline appears to have been driven by profit taking after a strong share price gain this week. Investors were buying the biotech company’s shares earlier this week due to its promising COVID-19 ARDS trial. On Wednesday Mesoblast advised that it has just dosed the first patients of its phase 2/3 trial.

The Orora Ltd (ASX: ORA) share price is down almost 1.5% to $2.40. This follows the release of the packaging company’s market update this morning. That update revealed that Orora intends to return ~$600 million to shareholders by June 30. This comprises a capital return of $150 million and a special dividend of $450 million. This equates to a total return of 49.7 cents per share.

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Returns as of 6th October 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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