Blown Up

If a stock falls 80%, it has to make 400% to get back to even. That unenviable challenge is where a lot of companies find themselves today. 303 stocks in the Russell 3000 are down more than 80% from their high.

These stocks collectively have lost more than $1 trillion in market cap from their high.

$1 trillion in wiped out market cap is way more than I thought. I guess I underestimated the size of some of these high fliers. All of the names in this chart once had $20 billion market caps. Ten of them were over $50 billion.

A little lower down the food chain and it starts to get really gnarly. (More charts/tables at the end of the post)

Vimeo went from $8.5 billion to $1.1. Beyond Meat went from $12.2 billion to $1.5 billion. Peloton went from $40 billion to…wait, Ring Central had a $40 billion valuation?!?!?!? That’s what happens when your price-to-sales goes from 5 to 20. For some context on how crazy that number is, General Mills has a market cap of $40 billion today. Chipotle is $35 billion. Prudential and Aflac are each $34 billion. Peloton is now at $3.3 billion and trading at less than 1x sales.

It’s wild to think about how different the investable landscape looks today versus early 2021. We went from growth at any price on the way up to no growth at any price on the way down. Eventually, these names will find a bottom, but there’s no telling where that is.