It's not a surprise to see nearly 600 stocks hitting fresh lows this past week. The Dow has been sliding for five weeks in a row, and investors are nervous about the fallout from the trade tariffs battle with China and signs that the once-hot economy is starting to slow.
Weibo (NASDAQ: WB), Tesla Motors (NASDAQ: TSLA), and Blue Apron Holdings (NYSE: APRN) are among the big-name stocks hitting 52-week lows last week. Let's go over the reasons why things have gone wrong for these three former market darlings.
Image source: Blue Apron.
Growth is decelerating sharply at China's leading social site. Revenue rose 14% in last week's quarterly report. Most companies would love to be checking in with double-digit top-line growth, but we've now see Weibo's revenue growth slow for six consecutive quarters. The deceleration has been brutal. This streak started with an 81% revenue surge in the third quarter of 2017, and Weibo has yet to hit rock bottom. Its guidance for the current quarter stunned investors, targeting just 7% in growth on the top line.
At least two analyst soured on Weibo following the report. HSBC downgraded the stock from hold to reduce, the equivalent of a sell rating. Fawne Jiang slashed her price target on Weibo from $81 to $51, noting the ad slowdown that's stinging other popular Chinese online destinations.
The worst performer among Nasdaq 100 components this year is Tesla, plummeting 43% this year. The stock has now eaten into its previous two years of gains, trading at its lowest level since late 2016.
There are plenty of things holding Tesla back these days. The older Model S and Model X vehicles have seen their combined deliveries dip year over year as well as sequentially. The new entry-level Model 3 has also seen its deliveries slip sequentially, and recent pricing swings to stir demand or adjust for rising costs aren't working or helping. Wall Street pros have also been lowering their price targets as they brace for the new normal.
The meal-kit provider has been going hungry for a long time. Revenue had declined for six straight quarters, eating into any momentum that Blue Apron may have had when it went public two summers ago. The latest dagger came early last week when Blue Apron put up a reverse stock split for a shareholder vote.
With Blue Apron's stock price falling to the point where it needs to artificially inflate it in order to meet exchange listing requirements, a reverse stock split isn't a surprise. However, investors have seen how, more often than not, a stock going for a reverse split continues to slide.
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