Why Did Lemonade Fall 24%?
From now on, our Daily Insight every Friday is going to be a quick wrap-up of the biggest movers of the past week in the MyWallSt shortlist. Through this, we hope to cut out the market noise by simply focusing on any information that you need to know from the stocks that have fluctuated most in the past week.
And what a week to have started!
As I write, the tech-heavy Nasdaq is down close to 8% since Monday, with the Dow Jones and the S&P 500 also in the red (albeit nowhere near as much). A lot of this sell-off seems to have been prompted by fears over rising interest rates and bond yields, as well as the fact that many of those tech-stocks were hitting all-time highs time and time again over the past few weeks.
Don’t forget though, as long-term investors we have the luxury of sitting back, ignoring the panic, and maybe picking up a few of our favorite companies at discount prices!
Here were the biggest movers in the MyWallSt shortlist for this week (from market-close on Friday 26/02 to market-close on Thursday 04/03):
Moving Up ⬆️
Eventbrite (EB) +15.1%
GoPro (GPRO) +6.0%
Tripadvisor (TRIP) +4.2%
Under Armour (UAA) +4.1%
Calavo Growers (CVGW) +4.1%
Moving Down ⬇️
Lemonade (LMND) -23.8%
The Trade Desk (TTD) -20.5%
Zillow (Z) -15.4%
ShotSpotter (SSTI) -14.8%
PagerDuty (PD) -14.7%
What You Need To Know:
The online ticketing service was the biggest gainer of the week so far as increased optimism over the accelerated recovery of the event industry drove the stock up 15.1%. The event manager recently reported Q4 results which reflected an improvement in paid ticket volumes that drove top-line growth of 22%, as well as severe cost-cutting which is expected to boost profitability in 2021. You can read more in our recent comment update for Eventbrite.
The world’s largest travel site announced a new subscription service, TripAdvisor Plus, which has won over Wall Street and sent the stock up 4.2% this week. Previously, Tripadvisor has found it difficult to monetize traffic from its 400 million monthly visitors. However, the new paid subscription service should help on this front while offering users access to deals from hotels and other holiday services for $99 a year — a welcome bit of good news after a tough year for the travel industry.
The insurance disrupter reported strong Q4 results on Monday, but a disappointing outlook for 2021 sent Lemonade’s shares tumbling 23.8% this week. The insurance provider's sour forecast of $22.5 million in revenue for Q4, and up to $117 million for 2021, left Wall Street unimpressed. Lemonade said it does expect its gross loss ratio to spike in Q1 after its financial model was tested significantly following the unprecedented Texas freeze, a state where a quarter of its customers live.
The ad tech company’s stock plunged 20.5% this week following Google (GOOG) promise to not use technologies that track people individually across the internet. Google’s post on Wednesday warned against solutions based on people’s email addresses as they won’t meet rising consumer expectations for privacy, casting some doubt for Trade Desk investors. The fall comes amid the wider slump in the Nasdaq.
The American cloud computing company was another victim to the recent sell-off in cloud stocks, sending its share price down 14.7% by market close last night. Shareholders have been dumping their holdings to take profits from their tech stocks, shifting part of their holdings to traditional sectors that are expected to benefit from an economic recovery as vaccines are rolled out globally. You can read our recent Daily Insight where we discuss the recent tech sell-off here.