Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Netflix, Peloton, and Zoom Plunged Today

By Joe Tenebruso - Mar 3, 2021 at 6:16PM

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

Stocks that outperformed during the coronavirus pandemic are now crashing. But should investors be selling their shares?

What happened

Investors sold off stay-at-home stocks on Wednesday, following positive news on the COVID-19 vaccine front. By the close of trading, shares of Netflix (NFLX 1.56%), Peloton (PTON -1.49%), and Zoom Video Communications (ZM -1.32%) were down 5%, 8%, and 8%, respectively. 

So what

President Joe Biden said on Tuesday that the U.S. would have a sufficient supply of COVID-19 vaccines to inoculate every adult in the nation by the end of May. That's two months earlier than his previous projection. 

Biden's accelerated timeline follows the U.S. Food and Drug Administration's decision to issue emergency use authorization to Johnson & Johnson for its single-shot coronavirus vaccine. J&J is working with its rival Merck to strengthen its manufacturing capabilities and accelerate the drug's rollout. "Extraordinary times take extraordinary efforts," J&J CEO Alex Gorsky said during an interview on CNBC yesterday. 

A person is pointing to a stock chart that rises sharply and then falls.

Investors rotated out of stay-at-home socks on Wednesday. Image source: Getty Images.

Many investors took the news as a reason to sell stocks that have performed well during the coronavirus pandemic. This included so-called stay-at-home leaders Netflix, Peloton, and Zoom.

Now what

The positive vaccine news will likely save countless lives and should certainly be celebrated. However, it doesn't mean the end is nigh for businesses that have seen their sales grow during the COVID-19 crisis.

People will continue to watch movies on Netflix, exercise at home on their Peloton bikes, and use Zoom's software to conduct video meetings. Yes, their growth could slow, but with their stocks pulling back sharply in recent weeks, this may already be reflected in their share prices. Thus, long-term investors may wish to use any further declines as an opportunity to buy shares of Zoom, Peloton, and Netflix at a discount from their recent highs.

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.
NFLX
$186.35 (1.56%) $2.87
Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$89.74 (-1.32%) $-1.20
Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$14.51 (-1.49%) $0.22

*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
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

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.