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SHOT TO THE SPIKE

Peloton, Zoom, and Netflix shares are tanking on Pfizer’s vaccine-trial news

A logo for Pfizer is displayed on a monitor on the floor at the New York Stock Exchange in New York, U.S., July 29, 2019.
REUTERS/Brendan McDermid
Pfizer's vaccine news today wasn't positive for everyone today.
  • Karen Ho
By Karen Ho

Global finance and economics reporter

Published

Several companies that saw huge boosts to their stock prices during the pandemic sank deeply this morning after Pfizer announced its vaccine candidate was more than 90% effective at preventing Covid-19.

Pfizer’s early analysis of the vaccine candidate it is developing with BioNTech has not been peer reviewed or submitted to regulators. Nonetheless, the results for immediately boosted the S&P 500. Shares of Peloton, Zoom, Etsy, and Netflix sank on the news.

Shares of Peloton, the exercise bike company that saw sales spike after gyms closed around the world, fell more than 26%. Craft and home-goods platform Etsy, as well as the video conferencing software company Zoom, both fell by about 18%. Netflix, the streaming entertainment giant saw a decline of about 9%.

While all four stocks had rebounded slightly by 2pm, they were still far below their previous levels. A viable vaccine could mean slower sales and growth for the four companies. It would follow two successful quarters driven by the pandemic-related changes in consumer and business behavior.

Sales for Peloton‘s bikes grew to 172% year-over-year, lengthening customer wait times to several months, sparking the release of new models, and even spurring involvement in the hot secondary market.

Netflix saw 16 million new viewers and turned the Tiger King into a cultural phenomenon.

Etsy saw thousands of new sellers and buyers flocking to its platform each week. Demand for its masks and other pandemic-related items drove third-quarter sales to 128% year-over-year growth.

The widespread switch to working from home, remote learning, and video health services helped boost the enterprise adoption of communications provider Zoom by 458% year-over-year. The company’s second-quarter revenue also grew 355%.

Even with anticipated sales declines, it’s likely these four stocks will still end the year ahead. The expected timelines for approval and production of a coronavirus vaccine; the large number of companies and schools that expect to be operating remotely well into next year; as well as the rising number of Covid-19 cases across the US all mean a vaccine’s impact wont be felt for a long time.

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