Please ensure Javascript is enabled for purposes of website accessibility

Why DocuSign, Netflix, and Roku Technologies Stocks Dropped Today

By Rich Smith - Updated Mar 24, 2020 at 2:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The coronavirus-inspired selloff verges on the irrational.

What happened

The stock market took a tumble this morning (in case you hadn't noticed), with the Dow, Nasdaq, and S&P 500 all down well over 2%. Tech stocks are taking things especially hard on the chin. In early trading, shares of both sign-documents-from-home e-signature company DocuSign (DOCU -5.91%) and watch-movies-at-home streaming service Netflix (NFLX -0.60%) were down nearly 10%, while shares of over-the-top streaming device-maker Roku (ROKU -4.68%) tumbled 5%.

As of 10:20 a.m. EST, DocuSign shares remain down 3.2%, Netflix down 2.6%, and Roku is off 4.6%.

A map of the world with the word "coronavirus" written over China and red rings getting lighter as they move out from China

Image source: Getty Images.

So what

The reason: the coronavirus. Over the weekend, it was reported that the Chinese COVID-19 coronavirus had broken out in multiple new locations, including Italy and South Korea. Johns Hopkins University, which was attempting to keep track of the disease's progress on a central website, got swamped by new requests for data this morning and is now reporting no data at all.  

(And nothing's more likely to spark a panic on Wall Street than the complete absence of data).

Still, does it make sense to sell these stocks in particular? After all, just last week, I made the argument that DocuSign and Netflix stocks, at least, should be immune to coronavirus concerns because they've built their businesses upon the idea that people can stay home and avoid contact with other humans if they want to. (Roku, by the way, does essentially the exact same thing.)

Now what

I suppose I could see a reason for today's news to spark a sell-off in companies that profit from bringing people together in close proximity -- cruise lines, for example, or airlines and restaurants. But stocks that intentionally make it easier for business to go on, and for people to live their lives safely from the comfort of their own homes?

That makes no sense at all. DocuSign, Netflix, and Roku stocks may all be down today, but I predict they'll be right back up in relatively short order.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$186.51 (-0.60%) $-1.13
Roku Stock Quote
$93.26 (-4.68%) $-4.58
DocuSign Stock Quote
$74.49 (-5.91%) $-4.68

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.