Pandemic Tech Darlings Turned To Duds in 2021 (wsj.com) 38
For a sector historically known for its fast-forward pace of innovation, consumer technology sure did a lot of backpedaling this year. From a report: The Nasdaq CTA Internet Index is in the red this year compared with a return of more than 27% for the S&P 500. Cathie Wood's famed ARK Innovation ETF, more than 30% of which was invested in information technology as of Sept. 30, has seen its net asset value decline 21% this year, underperforming the S&P by nearly 49 percentage points. She isn't alone. If you invested in enough tech stocks this year, you probably got burned by a few of them.
Select lowlights include fitness-equipment company Peloton Interactive, down nearly 75% this year; social-commerce company Poshmark, down almost 82%; and education-tech company Chegg, down 66%. At certain points, the number of names blowing up simultaneously was dizzying: Chegg, Peloton, Zillow Group and Vimeo all took nosedives around their most-recent earnings reports, collectively erasing some $26.3 billion in market value in a single week last month. A big part of the problem was the huge run logged in stay-at-home stocks in the latter half of last year. Many of tech's 2020 darlings became duds simply by virtue of the fact that they appreciated too much too quickly. In the end, the numbers couldn't keep pace.
Ms. Wood, at least, is sticking with the strategy that failed her this year. She said in a Bloomberg interview earlier this month that she expects it to yield "a compound annual rate of return of roughly 40% over the next five years," emphasizing, "That's a quadrupling." But investors shouldn't expect all of this year's dips to lead to easy dunks next year. Zillow, for example, is down over 50% in the year to date, and while its future without iBuying looks to be a much more steadily profitable business, the online real-estate company is still worth more than twice as much today as it was in early 2019, when it went big into the automated home-flipping business. If the tech sector has to earn its gains next year, many of its stocks still face an uphill battle.
Select lowlights include fitness-equipment company Peloton Interactive, down nearly 75% this year; social-commerce company Poshmark, down almost 82%; and education-tech company Chegg, down 66%. At certain points, the number of names blowing up simultaneously was dizzying: Chegg, Peloton, Zillow Group and Vimeo all took nosedives around their most-recent earnings reports, collectively erasing some $26.3 billion in market value in a single week last month. A big part of the problem was the huge run logged in stay-at-home stocks in the latter half of last year. Many of tech's 2020 darlings became duds simply by virtue of the fact that they appreciated too much too quickly. In the end, the numbers couldn't keep pace.
Ms. Wood, at least, is sticking with the strategy that failed her this year. She said in a Bloomberg interview earlier this month that she expects it to yield "a compound annual rate of return of roughly 40% over the next five years," emphasizing, "That's a quadrupling." But investors shouldn't expect all of this year's dips to lead to easy dunks next year. Zillow, for example, is down over 50% in the year to date, and while its future without iBuying looks to be a much more steadily profitable business, the online real-estate company is still worth more than twice as much today as it was in early 2019, when it went big into the automated home-flipping business. If the tech sector has to earn its gains next year, many of its stocks still face an uphill battle.
These are hardly "duds" (Score:2)
Since they are listed, they've already made their investors filthy rich. That some idiots who bought into an overhyped bublle lost some money is just par for the course.
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As a consumer Palantir made me money. I bought in at the low of 9. I averaged up to 15 when I bought some more a few months later. But still doing good.
But yeah, they're not the only investment in my portfolio. I invested in some dividend stocks like AT&T, Verizon, and Suburban propane. Been pretty happy this year.
Re:These are hardly "duds" (Score:4, Insightful)
Palantir? I hope you at least do not claim to be a decent human being. Because you are not.
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If you don't really know anything about Palantir and you make ad hominem attacks on people, can you really say you're decent? Perhaps you should do some factual research first.
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Dude's right. Investing in Palantir is like investing in IG Farben during WW2. If you're willing to overlook how they make their money, you score lower on the decency scale.
But hey, your portfolio is doing well, so well done you...
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Dude's right. Investing in Palantir is like investing in IG Farben during WW2. If you're willing to overlook how they make their money, you score lower on the decency scale.
But hey, your portfolio is doing well, so well done you...
Cotton manufacturers provide material for uniforms for US troops fighting in wars you don't agree with. Might also be in your favorite clothes you wear. The copper in your PC, could be from the vendor selling metal for bullet casings. Do you know who the broker is selling to when they pimp copper by the ton?
No, I'm not invested in or defending Palintir. Point here is, your portfolio likely has blood on it too. Think defending an investment in Google or Amazon, is any easier on the moral or ethical scal
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Highlights included expensive/rare items of star wars memorabilia, and a very large counter entirely covered with thermochromic tiles among other things.
Did those "other things" include tungsten cubes, by any chance?
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You think I am criticizing a splinter while there is a beam in my eye? Think again.
Re: These are hardly "duds" (Score:1)
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Since they are listed, they've already made their investors filthy rich. That some idiots who bought into an overhyped bublle lost some money is just par for the course.
Uh, that overhyped bubble you're referring to, is called the entire US Stock Market right now. Perhaps step off the golf course to gain a bit of realistic perspective.
We have Greed N. Corruption doing what it does best; getting rich of a House of Cards. The crash will have Greed scurry under the skirt of Big Daddy Government, crying Too Big To Fail. And taxpayers will pay for that, while Greed laughs.
Again.
If this were all "par for the course" grown-ass adults in the media politically dismissing obviou
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I'll take inflation with full employment over a depression any day. As long as the US has the cleanest white shirt they should keep printing. USD is rising against the Euro. Let stocks go to the moon, with full employment wages will start keeping pace with inflation soon enough.
If the only alternative you have is the "creative" destruction of mass unemployment and depression come up with something better.
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I'll take inflation with full employment over a depression any day. As long as the US has the cleanest white shirt they should keep printing.
Yes, because we've learned so much since 2008 to avoid the inevitable, right? I'm sure the average US Taxpayer can't wait to see who stands up to claim Too Big To Fail now, since Greed N. Corruption was rewarded with that before.
USD is rising against the Euro. Let stocks go to the moon, with full employment wages will start keeping pace with inflation soon enough.
Full employment becomes an empty promise in the face of unchecked inflation. Those living in Turkey are enduring that pain by the day right now. And that employer you're assuming will play "catch-up" with all of this in your paycheck, is a bit busy right now doing their math; th
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Uh, that overhyped bubble you're referring to, is called the entire US Stock Market right now.
Yes, the whole stock market is overhyped now. But what's happened is that companies actually generating profits and issuing dividends are catching up with the companies that are talking about growth but continuing to deliver more smoke and mirrors. Cautious investors are balancing their portfolios by cashing out their gains from ARK stocks and investing that money in companies delivering products and earning profits now.
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"Stonks, why you no go moon?!"
This is what happens when you have a generation of investors who learned everything they know from the cryptocurrency market and trading turnips on Animal Crossing.
Re: These are hardly "duds" (Score:2)
Re: These are hardly "duds" (Score:2)
Peleton shouldn't have been that high (Score:4, Interesting)
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A lot of these companies shouldn’t be (including Tesla), retail investors are confused about what actually justifies tech stock valuations. The key factors for tech stocks are that the cost of customer acquisition is low, your product (software or a service built on software) can be duplicated inexpensively, and really it needs to be something the user returns to repeatedly.
Apple is weird because they’ve managed a supposed 40% margin on hardware before other service add-ons, but otherwise if yo
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Nothing should be as high as it is (Score:1)
It was a spike caused by people having to work out at home
That was part of it but it was a larger meta-spike caused by people just dumping money into what had turned into a casino. Just buying to push up higher, which is how so many tech stocks ended up with insane valuations.
There is a LOT of undoing remaining in the stock market as a whole, not just Peloton, and Peloton itself has a lot of room to sink, for any pdf those trying to decide if they should be the dip.. I mean buy the dip.
Good (Score:4, Insightful)
I can't stand companies that profit from people's misery. The big data giants have been particularly nauseating in that respect in fact.
Plus, in the case of Peloton, anything that will stop them from flooding each and every TV station with advertisement gets my vote.
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Same here. The psychos that make money that way (and that very much includes the share-holders) are the worst of the worst the human race has to offer.
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Incorrect. (Score:1)
Many of tech's 2020 darlings became duds simply by virtue of the fact that they appreciated too much too quickly. In the end, the numbers couldn't keep pace.
This is incorrect. The "darlings" became "duds" because they were ill-conceived piles of shite (duds) in the first place. It just took a while (though much quicker than usual) for the general populace to recognize that utter shite is, well, utter shite.
Not duds (Score:4, Insightful)
Simply corrected back to the price they should have had before Wallstreet did their usual retarded panic buying of stocks due to some external event. Peleton sells exercise equipment. Their stock price is exactly the same as it was prior to the pandemic. It had no business shooting through the roof and any pandemic boost they could have had would have been temporary. Chegg, well their price is back to what it was pre-pandemic when the world got sick of having their kids at home.
All these tech companies shot to stupid highs for no real reason other than someone was trying to make a quick buck in the stock market during the pandemic.
The standout is Poshmark who only just went public. Yeah that is a dud.
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less Wall Street and more retail investors
Honestly I don't think retail investors had the kind of funds globally to push tech stocks the way they did. This isn't just one or two companies we're talking about. The entire NASDAQ went insane.
A compound return of 40% is quadrupling? (Score:2)
I don't quite follow the math...
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Online educdation and video call conference tools (Score:1)
It's not that their popularity hasn't increased, it's that people were writing business plans on paper towels at home, rather than on the business lunch napkins they used during the dotcom boom. And there are far too many competitors to turn a profit, all prepared to "pivot". to new markets.
Idea! (Score:3)
Chegg sounds like an act of chugging stuff more likely to be seen on Pr0n than a respectable corporation. "Ah man, she chegged the whole soccer team, while they zillowed her. "
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