Money flowing out of favorite pandemic-era stocks

Money flowing out of favorite pandemic-era stocks

Stock prices of lockdown-era favorites Netflix and Peloton nosedived on Thursday, in a latest sign that the boom for stay-at-home shares appears to be vanishing.

Peloton shares plunged 24%, wiping off nearly $2.5 billion in market value, after the exercise bike maker's CEO said it was reviewing the size of its workforce and “resetting” production levels.

Data from S3 Partners shows short-sellers doubled their profits by betting against Peloton in 2021, the third-best returning US short.

Shares in streaming giant Netflix also plummeted nearly 20%, as the company forecast new subscriber growth in the first quarter would be less than half of analysts' predictions. It also expects to add just 2.5 million users in the current quarter, well short of estimates.

Netflix CEO Reed Hastings said there were a myriad of reasons for the company's low guidance, pointing to increased competition as a cause.

The two firms are the latest darlings of 2020 to sink to levels not seen since the early days of the Covid-19 outbreak. Others, such as Zoom video conferencing software and the e-signature company Docusign, have also suffered downward revaluation of their stocks.

“With a return to the office and travel lanes opening, darlings of the WFH (work from home) thematic are reflecting the growing reality that the world is moving slowly but with certainty towards a new normalcy,” Justin Tang, head of Asian research at United First Partners in Singapore, was quoted as saying by Reuters.

For more stories on economy & finance visit RT's business section

Source: www.rt.com

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