Investors took another beating in April with major stock indexes losing trillions in value. The S&P 500 fell nearly 9%, while the Nasdaq Composite plunged more than 13%. Corporate earnings reports, fears of an upcoming recession, rising interest rates, and inflation all played major roles for last month’s winners and losers. Here are some of the high-profile names that illustrated major trends in the stock market in April.
Shares of Netflix (NASDAQ: NFLX) dropped nearly 50% in April after a disastrous earnings report. For the first time in over a decade, the streaming content disruptor reported a decline in its subscriber count. Investors were already concerned about slowing growth prior to this announcement, and the stock has been dealing with dwindling momentum from COVID-19 stay-at-home trends.
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Stocks often experience major valuation shifts as they transition from growth to value. That seems to be playing out as Netflix settles into a more established role in a maturing industry, but there are other factors at play too. There’s extensive competition from a long list of streaming platforms. There’s also concern that consumers are reaching subscription fatigue. That’s not good for Netflix’s growth and cash flow potential, and the stock is taking a beating as a result.
Coinbase Global (NASDAQ: COIN) tumbled 41% last month, even though there wasn’t any earnings news from the company. There was some analyst chatter that impacted the stock with negative commentary about the rising influence of competition. None of that is exactly news, but such headlines can certainly drag share prices downward.
More than anything, Coinbase was the victim of capital market forces. Investors are pulling money from risky assets, including growth stocks and cryptocurrencies. Bitcoin dropped around 20% last month, and many of the smaller currencies and tokens fell even further. Coinbase is a growth stock, and its financial results reflect activity in crypto markets. It was the perfect storm for a bad month. The long-term investment thesis didn’t change much for Coinbase. It’s cheaper if you happened to like the business, but all of the same risks are still present.
Tech giant Amazon (NASDAQ: AMZN) fell almost 24% last month after a tough earnings report. This stock’s decline highlighted a number of major economic and market trends all at once. Like other retail stocks, Amazon is struggling with inflation, and margins …….