Netflix slumped, as the video streaming company extended a post-earnings sell-off that brought shares to their lowest level since March 2020.
The stock fell 11.6 percent and fell more than 30 percent during the past three trading days. Year-to-date, the stock is down more than 40 percent, making it the second-worst performer among the Nasdaq 100 components, behind Moderna.
Pandemic-era trading favorites are becoming trapped in a widespread exit rotation from growth stocks, as concerns about inflation and Fed tightening have made investors less tolerant of highly rated names.
Additional weakness came after Netflix gave subscribers expectations last week that were weaker than expected. The stock is down nearly 22 percent on Friday, and January is on track to be the worst month for Netflix stocks since September 2011.
Losses are mounting for investors who have rode the hot trend of stockpiling pumped-up stocks on social media platforms like Twitter and Reddit.
AMC Entertainment Holdings and GameStop have slumped, taking losses over the past two months to about 60 percent, as investors dumped shares of previously high-rise companies and companies that went public by merging with blank check companies.
A basket of 37 meme stocks tracked by Bloomberg sank 10 percent at 12:30 p.m. in New York, extending a seven-day slide now that has wiped out more than 20 percent of its value.
The companies that rallied at the beginning of last year have surged as they take over forums like Reddit’s WallStreetBets and the Stocktwits chat room as investors bail out losing bets and riskier investments like cryptocurrencies.
Companies that have gone public through merging with special purpose buyout companies, known as SPACs, have been in free fall over the past 11 months. The De-SPAC index, which tracks 25 companies, is down 68 percent from its February high, shedding more than a third of its value since the start of January.
Vaccine makers are proving that the vaccine trade is finally over.
Moderna and BioNTech, two major providers of COVID-19 vaccinations that have surged amid the pandemic, have both fallen more than 40 percent since the start of January, poised for their biggest monthly drop ever. Novavax Inc. declined. by up to 22 percent on Monday alone, and is down more than 70 percent since early September. CureVac NV is also down.
The decline was driven by a stark shift into value stocks and away from the previously hot vaccine and biotech companies, particularly among retail investors seeking refuge from the stock market slump.
Day traders “have been selling their favorite biotech and vaccine names,” said Giacomo Pierantoni, a data analyst at Vanda Securities who tracks retail trading trends.