Daily Column – 19th February 2022

There are now more and more companies that thought they had taken the Limitless drug when the pandemic was at its peak. It was just a placebo.

Roku’s stock fell 22% on its worst day of trading since 2018. Investors were angry with the streaming service because of poor Q4 numbers and a gloomier-than-expected outlook for the next quarter.

In 2020, shares rose nearly 150%, but now they’re down more than 75% from their July 2021 high.

In the last year, Roku and many other companies have seen their big rise in 2020 overshadowed by their big fall, which was just as big.

Covid e-commerce was a big thing for Shopify, but now it’s down 62% from its peak.

Roblox, which was a symbol of the Covid gaming boom, has lost 63% of its value.

Netflix, which was a big part of the Covid streaming boom, is down 43%.

One might even say that the companies that are said to be pandemic winners are not only not winners, but they are also losers, too. They thought that Covid would change the way people bought things forever, so they made bad decisions that hurt their future.

We don’t want to be mean to Peloton, but let’s be mean to Peloton. In May 2021, the company said it was going to build a $400 million factory in Ohio to keep up with the demand for at-home workout gear. This decision was made after 2,800 jobs were cut, the stock fell by 82%, and a new CEO was hired. Ex-boss John Foley said on his way out: “To meet the market demand, we grew our operations too quickly and we overinvested in some parts of our business.”

But it’s not just consumer behaviour that went back to how it used to be. These growth stocks also took advantage of low interest rates from the Fed, which is almost certain to end this year because of rising prices.

Looking at the next few years…

Many of these companies still have people who believe in them, like Ark Invest’s Cathie Wood, who says that innovative tech companies have to go through a rough patch before they can reach their long-term goals. Wood said this week, “Give us five years.”

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