Champion Stocks During the Covid-19 Pandemic Begins to Fall

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Champion Stocks During the Covid-19 Pandemic Begins to Fall


When the Covid-19 pandemic has subsided, the glory of some of the stocks in the US stock exchanges that won at that time began to run out of power. Wall Street appears to be starting to leave streaming services and other pandemic winners behind.

Take, for example, billionaire William Ackman who sold his entire stake in Netflix for $1.1 billion after losing $400 million. Indeed, Netflix's stock has plunged 37 percent, while its valuation has fallen two-thirds from its peak of more than $300 billion late last year.

One of the reasons for this is the number of Netflix subscribers that has decreased to 200,000 subscribers, the first in the last decade.


The bad report and the sell-off also had an impact on shares of other streaming service providers. For example, Walt Disney was down 5.8%, Paramount Global was down 8.1%, Warner Bros. Discovery was down 5.2% and Roku was down 5.8%.

In fact, Disney shares also had their heyday when its video streaming service Disney+ launched in 2019, as well as helping theme park operators cope with pandemic-related shutdowns. However, after peaking a year ago, Disney shares have continued to weaken and are now trading at levels below when Disney+ launched.

On the other hand, Netflix's market cap is by far the smallest among the so-called FAANG stock pool at around $100 billion. The FAANG stock pool includes Meta Platforms, Amazon, Apple and Alphabet that fueled most of Wall Street's rallies in the years before the Covid-19 pandemic

Facebook owner Meta Platforms is FAANG's next least valuable company, valued at around $550 billion, with its stake down about 7%.

Jim Bianco, president of financial market research firm Bianco Research in Chicago, said that portfolio managers who focus on high-growth stocks with expensive valuations can reflexively pick up Netflix's heavily discounted stock, overriding the company's increasingly difficult challenges with market saturation, sharing passwords. , and uncertainty in markets such as Ukraine and Russia.

"I think it's going to take them some time to start recognizing whether Disney and Roku and Netflix and Hulu and Paramount might not be growing companies anymore, that they might have reached their saturation point," Bianco said. )

Truist analyst Matthew Thornton also argues that Netflix is ​​the most vulnerable because it is the largest and most established, while competition is growing in the streaming industry. "They're going to feel it more than an emerging challenger," Thornton said.

Other companies that have benefited during the pandemic have also given up more of their profits in recent months as consumers move out of their homes and change their spending habits.


Peloton Interactive, Zoom Video Communications, and Pinterest have all fallen in recent months and are now down more than 60% over the past 12 months.

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