Broadly speaking, all three operate in the digital services sphere. Zuora offers software as a service to help businesses with subscription billing and revenue recognition. Fastly provides edge cloud computing to accelerate the apparent speed of internet services. And Redfin operates an online real estate marketplace.
Most pertinent now, however: All three of these stocks suffered steep sell-offs in Monday's stock market rout.
Zuora stock plunged 10.3% in Monday trading, Fastly was down a bit less with a 9.8% decline at the close, and Redfin was hardest hit at a 12.8% loss for the day. The likely reason: the COVID-19 coronavirus.
There are no two ways about it: Stocks sold off en masse Monday, and the selling wasn't always logical. Zuora and Redfin, for example, both suffered steeper losses than did Fastly. But of the three, Fastly was the only one that arguably had "bad news" to report Monday: One of its directors, Sunil Dhaliwal, disclosed his sale of over 150,000 common shares of Fastly stock from last week. By selling at share prices between $20 and $22, Dhaliwal managed to avoid the worst of today's market carnage.
Here's something that shareholders in all three of these companies need to be aware of: These companies are not profitable. They're not free cash flow positive, either.
They may be growing revenues briskly -- at Zuora, sales were up 17% year over year last quarter, while Fastly's sales grew 44.5%, and Redfin's were up a staggering 88%. But without profits, they're all tenuously situated to ride out something that began as a health crisis, but is now starting to look like it might turn into a full-blown recession.