Monday, May 16, 2022

US shares fall in early trade

Netflix fell, bucking a post-earnings selloff by the video-streaming company that has taken shares to their lowest level since March 2020.

The stock fell as much as 11.6 per cent and fell more than 30 per cent in the past three trading days. Year-to-date, the stock has sank more than 40 percent, making it the second-worst performer among Nasdaq 100 index components after Moderna.

Pandemic-era trading preferred stocks have caught on in wider rotation than growth stocks, as concerns about inflation and tightening of the Federal Reserve have made investors less tolerant of high-valuation names.

The additional weakness came after Netflix gave a subscriber outlook last week that was weaker than expected. The stock fell nearly 22 percent on Friday, and January is on track to be the worst month for Netflix shares since September 2011.


The losses are mounting for investors who rode the trend of accumulating in stocks being shared on social media platforms like Twitter and Reddit.

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AMC Entertainment Holdings and GameStop lost nearly 60 percent over the past two months, as investors formerly took high-flying meme stocks and companies public by merging them with dump-check firms.

A basket of 37 meme stocks tracked by Bloomberg sank 10 percent at 12.30 p.m. in New York, extending a now seven-day slide that wiped out more than 20 percent of its value.

Companies that grew early last year as ticker-populated forums like Reddit’s WallStreetBets and trader chat room StockTwitters spiraled as investors bail out money-losing bets and riskier investments like cryptocurrencies.

Companies that went public by merging with special purpose acquisition companies known as SPACs have been in free-fall over the past 11 months. The D-SPAC index, which tracks 25 companies, is down 68 per cent from February’s highs, having lost more than a third of its value since early January.

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Vaccine makers are proving that the vaccine business is finally over.

Moderna and BioNTech, the two major providers of COVID-19 inoculations that rallied amid the pandemic, have each fallen by more than 40 percent since early January, leading to their biggest monthly declines ever. Novavax Inc. fell as much as 22 percent on Monday alone and is down more than 70 percent since early September. CureVac NV has also fallen.

The steep turnaround in value stocks and the fall away from formerly hot vaccine and biotech companies, especially among individual investors seeking shelter from the stock market’s slump.

Day traders are “selling their favorite biotech names and vaccine plays,” said Giacomo Pierantoni, a data analyst at Wanda Securities, which tracks retail trading trends.

Nation World News Desk
Nation World News Desk
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