Hot Stocks: DIS Hits Low; FB falls; work-at-home stocks fall; ALVR, LRN Rally
Wall Street had a mixed performance on Wednesday. IBM’s gains helped the Dow post a gain of almost 250 points. However, the Nasdaq fell more than 1% after Netflix reported disappointing quarterly results.
The Netflix failure resonated across the market. In response, investors trimmed their positions in work-from-home games, leading to notable declines in names like Shopify (SHOP), Twilio (TWLO), Zoom Video Communications (ZM), and DocuSign (DOCU).
Meanwhile, Disney (NYSE:DIS) also suffered from the Netflix results. Worries about the growth of Mouse House’s streaming service sent the stock to a new 52-week low.
metaplatforms (NASDAQ:FB) was another notable loser in the session. The stock fell after a report claimed the social media giant’s business continued to deteriorate in the current quarter.
Looking at some of the day’s standout winners, AlloVir (ALVR) posted a double-digit percentage gain on a favorable regulatory decision. Meanwhile, earnings news sent Stride (LRN) to a new high.
sector in focus
A disastrous earnings report from Netflix sparked concerns across the work-from-home complex as investors bet that the post-COVID opening up of the economy would hurt the growth prospects of many of the names that have benefited during the pandemic.
Shopify (SHOP) was among the big losers in the group, falling more than 13% during the session. Twilio (TWLO) also posted a double-digit percentage decline, falling about 10%.
Elsewhere in the work-at-home space, Zoom Video Communications (ZM) saw a nearly 7% decline. Meanwhile, DocuSign (DOCU) is down 9%.
A major regulatory win triggered the purchase of shares in AlloVir (ALVR). The news sent the stock up almost 16%.
The gains followed an announcement that the U.S. Food and Drug Administration had granted its T-cell therapeutic Posoleucel another advanced regenerative medicine designation. This time, the FDA’s RMAT tag relates to the product’s use to prevent infections from six viruses, which commonly affect high-risk patients after allogeneic hematopoietic cell transplantation.
This is the third RMAT clearance that Posoleucel has received from the FDA.
Buoyed by the news, ALVR rallied to levels of $8.51 at the start of Wednesday’s session – up 57% from the previous day’s close. Shares fell significantly from there but still ended the day at $6.25. This represented a gain of 84 cents over the session.
On the rise, ALVR came further off a 52-week low of $5.19 set over the past few days. Shares remain a far cry from a 52-week high of $26.41 set early last year. Even with Wednesday’s jump, the stock remains about 75% down from where it was a year ago.
Meta Platforms (FB) fell nearly 8% after a research firm presented evidence pointing to a significant slowdown in Facebook parent company’s recent business.
Cleveland Research issued a statement saying FB’s business slowed even more in the current quarter than in the previous fiscal year. The company based its conclusion on channel checks.
FB closed at $200.42, down from $16.89 during the session. Shares fell off a cliff in February amid a shockingly disappointing fourth-quarter earnings report and continued to fall to a 52-week low of $185.82 in the first half of March.
The stock recovered through late March and early April, but recently lost ground again. Wednesday’s slide sent FB to its lowest close since March 15.
Notable new high
Earnings news sparked a rally in Stride (LRN) as increased demand for vocational training propelled the education technology company’s shares nearly 15% higher. The surge took the stock to a fresh 52-week high.
The company beat expectations on both revenue and earnings, including a nearly 8% increase in revenue. Sales rose to nearly $422 million. LRN saw a 38% increase in enrollment for its adult vocational programs.
Buoyed by better-than-expected results, LRN rose $5.25 to $40.60 on Wednesday. Shares also hit a fresh 52-week intraday high of $41.20.
Notable new low
Disney (DIS) sank to a new low, dragged down by streaming concerns caused by competitor Netflix’s disastrous earnings report. DIS fell nearly 6% during the session, falling to a new 52-week low.
Late on Tuesday, Netflix released a disappointing earnings report that sparked a 35% drop in its stock price. The company announced a decline in its subscriber base, attributing the disappointing number to competition, a high penetration rate with potential customers, and password sharing.
Public concerns about streaming saturation also hit competitors like DIS. The entertainment giant’s shares were dragged down by fears that its streaming service Disney+ would see a similar drop in subscriber interest.
As a result, DIS retreated $7.33 to close Wednesday’s action at $124.57. Shares also hit a 52-week daily low of $124.11.
DIS has faced intermittent selling pressure since early November when it traded above $175. Shares are down about 29% since then.
For more on the day’s biggest winners and losers, check out Seeking Alpha’s On The Move section.