Market Correction Hitting High Profile Stocks

By Tom Burnett CFA
In the midst of record high prices in the S/P 500 Index and the Dow Jones Industrial Average, there is a severe correction occurring among high-profile names whose stocks have sold off sharply from their 52-week high prices. We document some of the price collapses below:

Stock         Dollar Price            Decline from High Percentage Decline
ZM                 -$250                                    -43%
TSLA             -$190                                     -21%
SNOW           -$200                                    -46%
DASH            -$110                                     -43%
ABNB            -$46                                       -21%
QS                 -$101                                     -76%
NKLA            -$83                                       -89%
PTON            -$63                                       -37%
FSLY              -$69                                      -49%
TDOC            -$126                                     -41%
AFRM           -$81                                       -55%
AI                  -$121                                      -66%
Many of these stocks sold at premium multiples of revenue and earnings, before correcting sharply in a market that was generally moving higher. Clearly, the rising tide is not lifting ‘all the boats’. Investors need to pay attention to stock price multiples of book value, revenue and earnings to avoid getting swept into companies whose operating performance cannot match the expectations of the stock market.
Tom Burnett CFA is Director of Research