Pandemic darlings meet the boot when investors return to normal life

LONDON, Jan. 21 (Reuters) – Home-market-loving Netflix fell on Friday, joining a broad decline in market value of other pandemic favorites this week as investors priced in expectations of a return to normalcy as more countries gradually relax in COVID. limitations.

Sales that began after Netflix and Peloton (PTON.O) published disappointing quarterly results spread to the broader home sector, as analysts ruled the new Omicron coronavirus variant would not provide the same economic headwind seen in the first phase of the 2020 pandemic .

“It is a confirmation that the economy is gradually moving towards a form of normalization,” said Andrea Cicione, TS Lombard’s Chief Strategy Officer.

“What we find very interesting is that Omicron, due to its very high infectivity, very low morbidity compared to previous waves such as the Delta variant, may in fact be the first tangible sign that the pandemic is developing in the direction we all expected. , that is, it would be a manageable endemic disease like the flu. “

Shares in Peloton (PTON.O) lost nearly a quarter of their value on Thursday, wiping out nearly $ 2.5 billion in market value after the CEO of the exercise bike manufacturer said they reviewed the size of the workforce and “reset” production levels, although they denied that the company stopped production temporarily. read more

Peloton’s shares rose almost 6% on Friday, bouncing back slightly from a fall of 23.9% on Thursday, the largest one-day decline since 5 November.

France will ease the rules for working from home from the beginning of February and allow nightclubs to reopen two weeks later. read more People should return to the office to benefit from personal co-operation, the UK’s Secretary of Commerce said on Friday. read more

Meanwhile, Netflix shares fell nearly 20% after predicting the growth of new subscribers in the first quarter would be less than half of analysts’ predictions. read more

The shares fell 20% in pre-market trading, and the share was to open at the lowest level in 21 months.

HOME DELIVERY

Both companies were part of a group, along with others such as Zoom (ZM.O) and Docusign whose shares rose in 2020, and in some cases also in 2021, when people around the world were forced to stay home in the face of the coronavirus.

But thanks to the rollout of vaccines and the spread of the less serious Omicron strain of COVID-19, life is returning to something close to normal in many countries, leaving companies like Netflix and Peloton struggling to maintain high sales figures.

According to data from S3 Partners, shorts sellers doubled their profits by betting on Peloton in 2021, the third best-returning American short.

“With a return to the office and travel paths opening up, the boyfriends of WFH (work from home) reflect the growing reality that the world is moving slowly but surely towards a new normality,” said Justin Tang, head of Asian research at United First Partners in Singapore.

Direxions Work from Home ETF has fallen more than 9% during the first three weeks of the year, compared to a 6% fall in the wider US stock market (.SPX) Blackrock’s virtual work and life sector ETF has weakened by more than 8% this year.

In Europe, lockdown winners are also going through a tough situation, with fears related to the Omicron wave slowing down, which contributes to the stress of raising bond yields and adding to growth and technology stocks.

The British online supermarket group Ocado (OCDO.L), the German delivery company HelloFresh (HFGG.DE) and the food delivery company Delivery Hero (DHER.DE) which emerged as European champions at home in the early days of the pandemic have underperformed the pan-European STOXX 600 so far in 2022.

Reporting by Alun John and Julien Ponthus; Additional reporting by Anisha Sircar and Chuck Mikolajczak; Edited by Saikat Chatterjee and Alison Williams

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