With people unable (or unwilling) to get to the gym, consumers scrambled to buy their exercise equipment and, more importantly, sign up for their online classes. Peloton posted its first quarterly earnings in calendar year 2020 as revenue soared 139% and shares soared 434%.
The impulse was short-lived. As gyms reopened and class subscriptions and equipment sales plummeted, so did the company’s outlook.
McCarthy, however, sees great things ahead for the company despite its troubles, saying Peloton has made significant progress in its turnaround efforts and has slowed its rate of cash burn.
Investors do not share his faith. The shares have lost more than 90% of their value since the end of 2020 and are now worth less than half of what they were worth at the beginning of that year.
Peloton isn’t the only pandemic winner to recently become a post-pandemic loser. Numerous companies that convinced themselves, and investors, that they were well positioned to continue to grow once Covid receded, have been proven wrong.
Here are some other 2020 stallions who have become busts in 2022.
The pandemic forced people to stay at home and, in millions of cases, to start working from there. Many took the money they were saving by not traveling or going on vacation to buy furniture and other items to fix up their homes.
“We’ve grown Wayfair significantly to keep pace with the growth of e-commerce in the home goods category. We saw the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth,” CEO Niraj Shah said in a letter to staff announcing the layoffs. “This year, that growth hasn’t materialized as we had anticipated. Our team is too big for the environment we’re in right now and unfortunately we have to adjust.”
It’s not just that the company isn’t growing as fast as it used to. Like Peloton, Wayfair has switched to reverse gear and red ink. Revenue in the first six months of this year is down 14% and it just reported a net loss of $697 million compared to a profit of $149 million in the same period of 2021.
Wayfair shares, which soared 482% between the end of March 2020 and the end of March 2021, have essentially given up all of those gains.
The Canadian software firm that helps retailers sell online was also a big winner when businesses were forced to move to e-commerce due to the pandemic. Last month, its founder and CEO announced that Shopify was cutting 10% of its staff because its continued growth “wasn’t paying off.”
The pre-Covid company The growth of e-commerce had been steady and predictable, he said, but the early days of the pandemic brought an unexpected surge in sales.
“Was this increase going to be a temporary effect or a new normal? So, given what we saw, we made another bet: We bet that the mix of channels, the part of the dollars that travel through e-commerce instead of the physical retail, take a permanent jump of five or even 10 years,” he said. “We couldn’t be sure at the time, but we knew that if there was a chance this was true, we would have to expand the company to match it.”
The good times didn’t evaporate as quickly as they did for some of the other pandemic winners. But they have certainly regressed.
While revenue was up 18% in the first six months of the year compared to a year ago, Shopify’s costs, including research and development, nearly doubled. The company also suffered a $1 billion paper loss on its equity investments in the second quarter, causing it to drop to a net loss of $2.7 billion for the period from a profit of $2.1 billion for the year. previous.
Shares of the company continued to hold up through 2021, but are down 75% year-to-date.
For the year, Zoom shares fell 56% and 86% from their peak in late October 2020, when the pandemic was at its height and no vaccines were widely available.
Part of the blame for the drop can be attributed to investors, who jumped ahead and pushed the share price up 765% between the end of 2019 and its peak 10 months later.
Netflix was very successful long before anyone heard about Covid-19. Even in the face of increased streaming competition, the platform had a successful 2019, as two original films, Martin Scorsese’s “The Irishman” and Noah Baumbach’s “Marriage Story,” attracted both viewership and best picture nominations. . “The Crown” returned for a third season with a new cast.
Netflix shares have also soared, more than doubling in value since the beginning of 2020 to a record high of $691.69 in November 2021.
The company has also been losing support from investors. Netflix shares have lost almost two-thirds of their value so far this year, though they have recovered from a 12-month low in May, when investors braced for even bigger subscriber losses.