Shares of Charlotte's Web Holdings (CWBHF 2.80%) were plunging 13.5% as of 12:46 p.m. EDT on Thursday. The steep decline came as part of an overall stock market crash resulting from an escalation of worries about novel coronavirus disease COVID-19.
Do the COVID-19 concerns really threaten Charlotte's Web's business prospects? Maybe to some extent.
Charlotte's Web's CBD products are carried in retail stores across North America. If consumers are too worried about becoming infected by the coronavirus to go shopping, the company's sales would likely fall.
The good news for Charlotte's Web is that a significant portion of its sales are made online. CFO Russ Hammer said in the company's earnings conference call in November 2019 that business-to-consumer e-commerce sales made up 51% of Charlotte's Web's total revenue in the third quarter of last year. It's possible that even if consumers don't shop in stores because of COVID-19 worries that they could opt to buy the company's CBD products online.
More importantly, though, any potential negative effects of COVID-19 on Charlotte's Web won't be permanent. There's a cycle for every infectious disease outbreak where things go from bad to worse to better.
Investing in stocks isn't nearly as much fun when there are major market meltdowns like we're seeing now. The best thing for investors to do right now is to stay calm, take a deep breath, and perhaps even use one of Charlotte's Web's CBD products. The market is scary right now, but brighter days will come.