Market Movers: A Big Week For The Losers

Market Movers: A Big Week For The Losers

Howdy folks!

Is anyone else exhausted? This market’s running many of us ragged, to the point that I’d just love a boring year. 

But fret not, the market is a cyclical beast and there’s always a light at the end of the tunnel — even if we can’t quite see it yet. For more about this “most volatile year”, you can read my colleague Mike’s excellent write-up here.

In the meantime, let’s dig up some juicy stories from the week.

Here were the biggest movers in the MyWallSt shortlist this week:

Moving Up ⬆️

Ericsson (ERIC) +9.8%

Nordstrom (JWN) +9.6%

Duluth Trading (DLTH) +4.8%

ServiceNow (NOW) +4.1%

Atlassian (TEAM) +2.8%

Moving Down ⬇️

Sea Limited (SE) -16.9%

Baozun (BZUN) -13.0%

Spotify (SPOT) -12.4%

Tesla Motors (TSLA) -12.2%

Airbnb (ABNB) -11.7%

The Winners

Ericsson (ERIC) +9.8%

A little slice of good news on our side of the Atlantic, the Swedish telecommunications leader’s Q4 earnings packed a mean punch. With adjusted earnings per share (EPS) of $0.36 for the quarter on revenue of $8.1 billion, it handily beat analyst estimates. Most exciting for investors, however, was Ericsson’s strong response to retaliation from China over Huawei being banned from Sweden’s 5G rollout. Facing troubles in the world’s largest economy is never good but increased 5G activity globally managed to offset these losses and prove that Ericsson can weather even the worst storms. 

Nordstrom (JWN) (+9.6%) and Duluth Trading (DLTH) (+4.8%)

The retail apocalypse is held off for another week at least, with investors taking hope that deep-pocketed wealth funds could save the day. If you’re confused, then join the club, because we’re now at a point where retail stocks are rising because people want them to get bought out. Nordstrom and Duluth were among a group of retail stocks that rose on reports that department store giant, Kohl’s, was subject to a takeover bid by a number of suitors. That move apparently got Wall Street thinking about other retailers that might end up as targets, thus providing a healthy boost of capital for otherwise beleaguered stocks. Needless to say, this is not the healthiest investment thesis, so be wary of this growth.

The Losers

Sea Limited (SE) -16.9%

The curse of the growth stock lingers like a bad smell and Sea Limited was one of its hardest-hit victims this week. Continuing concerns around high-growth, unprofitable businesses in an environment of rising interest rates hurt Sea Limited. Likewise, previously ignored bear theses have resurfaced, most notably the massive rivals in Tencent, Amazon, and Alibaba. However, as Sea Limited continues to sink — down 53% in six months — it is also looking more and more affordable to investors. Don’t be surprised to see further volatility in the coming months, but don’t forget the reasons why we have Sea Limited in our own shortlist. Click the link above to remind yourself why it’s a top investment. 

Spotify (SPOT) -12.4%

Copy and paste the above Sea Limited report and replace it with Spotify. However, you can also toss in a dash of Joe Rogan, Neil Young, and vaccine disputes to heighten the tension. The legendary musician gave Spotify an ultimatum last week that either Joe Rogan — controversial host of the world’s most popular podcast — would be dropped by the service, or Young’s music would leave the site. The row arose over Young’s perception of Rogan spreading allegedly harmful anti-vax ideas on his show. Having splashed $100 million in 2020 for exclusive rights to Rogan’s podcast, it seemed an easy choice for Spotify, though that hasn’t stopped widespread backlash in the form of boycott talks against the music streamer, sending its stock price tumbling. 

Tesla Motors (TSLA) -12.2%

It’s rare to see the world’s largest automaker at the bottom of this list, but even the mighty must be humbled at times. Despite a smashing success in terms of Q4 revenue — net income increased 760% year-over-year to $2.32 billion — investors were unimpressed with the company’s new product updates. Due to supply chain issues and demands, CEO Elon Musk was forced to push back production of its much anticipated Ford F-150 rival, the Cybertruck, to 2023. However, investors should be reassured that driver assistance and self-driving technologies were mentioned as a focal point for the coming year with Tesla noting “software-related profit should accelerate our overall profitability.”

JamieJamie

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