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Why Zoom, Square, DocuSign and Other Coronavirus Stocks Crashed Today

By Joe Tenebruso - Mar 8, 2021 at 9:43PM

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Investors are selling these previously high-performing growth stocks. But perhaps they should be buying.

What happened

Investors sold off many pandemic-related stocks on Monday after health officials issued less restrictive social distancing guidelines for vaccinated people.

Here's how some of the most popular stay-at-home stocks performed today:

  • Zoom Video Communications (ZM 8.16%), down 7.9%
  • Square (SQ 8.90%), down 6.7%
  • Teladoc Health (TDOC 8.49%), down 6.6%
  • JD.com (JD 3.79%), down 5.8%
  • DocuSign (DOCU 8.58%), down 5.6%

So what

COVID-19 infection and hospitalization rates are beginning to decline. Government officials, in turn, are moving to reopen the economy. On Monday, The Centers for Disease Control and Prevention (CDC) said fully vaccinated people can safely visit with other vaccinated people, as well as some unvaccinated people who are at low risk of severe COVID-19.

Better still, President Joe Biden said last week that the U.S. would have enough doses of coronavirus vaccines to inoculate every adult in the country by the end of May. Meanwhile, Congress is nearing the passing of a $1.9 trillion stimulus bill to further the economy's recovery.

A digital chart of declining stock prices

Image source: Getty Images.

These developments have led many investors to sell the stocks of companies that have performed well during the COVID-19 crisis, and buy shares of businesses that could benefit from a post-pandemic economic recovery.

Now what

Progress toward an eventual end of the health crisis is certainly good news. But it's not a great reason to indiscriminately sell stocks that have outperformed during the pandemic.

People will continue to use Zoom's and Teladoc's videoconferencing software and DocuSign's e-signature solutions, because they offer time- and cost-saving advantages. Digital payments and e-commerce will also continue to grow, and along with them, so too will Square's and JD.com's revenue and profits.

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Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$91.60 (8.16%) $6.91
JD.com, Inc. Stock Quote
JD.com, Inc.
JD
$53.14 (3.79%) $1.94
Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
TDOC
$33.49 (8.49%) $2.62
Block, Inc. Stock Quote
Block, Inc.
SQ
$89.36 (8.90%) $7.30
DocuSign Stock Quote
DocuSign
DOCU
$79.00 (8.58%) $6.24

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

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