At times over the past five business days, there was lively trading in digital adtech specialist The Trade Desk (TTD -0.19%). Unfortunately for the company and its investors, much of that trading consisted of sales.
On the back of a new partnership agreement signed by a well-capitalized rival, plus several analyst moves, the stock fell by more than 13% over the week, according to data compiled by S&P Global Market Intelligence.
It's a jungle out there
News of that deal hit the headlines Wednesday morning, and it wasn't good for The Trade Desk. Ubiquitous tech company/retailer Amazon and video streaming giant Netflix have partnered to offer advertisers utilizing the former's demand-side platform (DSP) to gain access to the ad inventory of the latter. The arrangement is to start in the fourth calendar quarter of this year.
Image source: Getty Images.
Amazon's gain is The Trade Desk's loss, so it wasn't surprising when investors sold out of the pure-play adtech company. Compounding that, several analysts weighed in with updates on the stock, and they only supported the sell case.
Meanwhile, white-shoe investment bank Morgan Stanley went as far as to downgrade its recommendation to equal weight (read: hold) from its previous overweight (buy), slicing its price target to $50 per share from the previous $80.
Better to trade other stocks
Jefferies also published an update. Although this wasn't as bearish as the new Morgan Stanley take, it didn't exactly sing The Trade Desk's praises.
Analyst James Heaney pointed out, according to reports, that the Amazon/Netflix tie-up is one of a series of recent combinations Amazon has forged with top names in modern media. The pundit also expressed understandable concern about The Trade Desk's lack of ad inventory exclusivity.
Heaney maintained his hold recommendation on The Trade Desk stock, and a price target of $50 per share.
