As the stock market plunges and the Nasdaq moves into correction territory, almost four out of 10 of the stocks in the Nasdaq Composite have share prices down 50% or more. Some will never return to the all-time highs, more because of broken business models than what will happen with the broader market.
Netflix Inc. (NASDAQ: NFLX) recently announced a slowdown in new subscribers. Its shares have an all-time high of $700.99, but they have dropped to below $380. The most brutal news is that the company believes subscriber growth from the fourth quarter of last year through the first quarter of this year will only be from 221.84 million to 222.34 million. Management hinted that competition was partially to blame. In reality, Netflix is up against streaming giants Disney and Amazon, along with several other well-funded streaming services from the likes of Apple.
Peloton Interactive Inc. (NASDAQ: PTON) has been so badly beaten down that shareholder Blackwell Capital wants its CEO fired and the company sold. The reasons for the demand are that Peloton’s products have developed a negative reputation and management has suggested it may make layoffs and cut back production. Several competitors have emerged as well. None may be as large as Peloton, but there are enough of them to erode market share. And the “exercise from home” trend has become less popular as more people brave the risk of COVID-19 infection to return to gyms. The stock has traded as high as $166.57 and recently has fallen to around $24.
Facebook, now called Meta Platforms Inc. (NASDAQ: FB), has one of the largest market caps in the world at $843 billion. The stock’s all-time high is $384.33 a share. Recently, it has traded near $303. The company faces two headwinds. Revenue growth has slowed, as has the rate of increase in earnings. More troubling, the company is under siege by a number of governments, some of which want to regulate Meta Platforms. The social media company has become a platform for misinformation and hate speech. Some critics go so far as to claim activity on Facebook has attempted to affect elections and has lengthened the pandemic by disseminating false information about COVID-19 vaccinations.
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