That loud thud you just heard was the market’s hard landing falling from nosebleed heights. The 5.7% slide since the late-July peak hardly qualifies as a crash, and is far from the beginning of a bear market. But, the sheer scope of dip to date has done some serious damage to stocks that could linger. Although the selloff has been so sharp it opens the door to something of a bounceback, the bulk of the damage won’t be quickly or easily repaired.
And as one might suspect, it’s the tech sector — and internet stocks in particular — leading the charge lower. The S&P 500 Internet Industry Index is off 9.1% from its peak with, a handful of the market’s most recognizable names being completely up-ended just since July 26th.
Here’s a rundown of the biggest setbacks suffered by the more important internet stocks in less than two weeks’ time.
Alphabet (GOOGL, GOOG)
Loss since July 26th: -6.2%
Incredibly enough, the owner of the portal through which most of the western world accesses the internet, Google, hasn’t been radically up-ended the way its peers have. Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) is only down 6.2% since things went south in late July.
That may have much to do with its post-earnings pop from June 25th though, when its second-quarter numbers were revealed. Sales were better than expected, and earnings projections were left in the dust. The pros were calling for a bottom line of $11.30 per share of GOOGL stock, but the company reported $14.20. With the post-earnings euphoria still intact at the time, GOOGL stock was able to hold more its ground than others.
Of course, it might have helped that between the Q1 report and the early June low, shares fell 20%, and were still down more than 12% before the second-quarter numbers were posted.
Loss since July 26th: -6.3%
Shares of streaming giant Netflix (NASDAQ:NFLX) have fallen 6.3% since the market-wide rout took shape, but note that the stock’s off 19.7% from its July 10th peak, and is down 9.0% since July 28th.
It’s not terribly surprising that shares of the streaming giant have been doing their own thing, largely independent of other internet stocks. Shareholders have been figuring out exactly what to make of the potential impact of Disney+ on Netflix’s commanding dominance of the market. Then, on July 17th, Netflix posted Q2 numbers that indicated subscriber losses rather than gains in the United States. Globally it only picked up 2.7 million new paying members, versus the five million analysts were modeling.
NFLX stock is also one of the few names that didn’t start to recover when the market began its rebound effort on Tuesday of this week.
Loss since July 26th: -8.3%
Facebook (NASDAQ:FB) has fallen 8.3% since the broad market peaked on July 26th, but like a few other internet stocks, FB stock was in trouble a little bit before that pivot. Since July 24th, Facebook shares have fallen 9.8%, even counting Tuesday’s small rebound effort.
This weakness may have just as much to do, if not more to do, with the company once again finding itself as a target of regulatory scrutiny. Namely, the FTC is investigating Facebook again, this time exploring whether or not the organization deliberately stifles competition by buying them. Its Instagram and WeChat deals seem to be particularly sore spots.
That investigation is a different one than the FTC’s privacy-related investigation, which had just been settled with a $5 billion fine.
Loss since July 26th: -8.5%
It has always been categorized as a software stock more so than an internet stock, even though its Photoshop and PDF software was largely created as a means of improving user experiences on the web. But there’s no getting around the fact Adobe (NASDAQ:ADBE) is as much of an internet stock as any name can be.
Case in point? Its photo-editing platform is now rented to users, who have cloud-based access.
It’s the Adobe you don’t know all that well that makes the company so tightly-linked to the internet as a business medium. Its so-called Experience Cloud allows enterprise-level clients to customize each its customers’ online experience, gather data about that user’s preferences and even manage tailored marketing campaigns.
The new Adobe is brilliantly conceived, but that hasn’t prevented shares from falling 8.5% in just the past few days.
Loss since July 26th: -9.1%
The 9.1% selloff shares of e-commerce behemoth Amazon (NASDAQ:AMZN) have logged since the market’s high made on July 26th isn’t much worse than the S&P 500 Internet Industry Index’s stumble. But, like other names earnings a spot in this dubious list, Amazon’s pullback comes with a footnote. Going back to its July 15th peak, AMZN stock is down 12.7%. It was, in fact, Amazon’s longest losing streak in 13 years.
CEO Jeff Bezos may have exacerbated it. Last week he sold $2.8 billion worth of his own shares.
General economic malaise will of course work against Amazon, domestically and abroad. Investors may be even more worried, however, about an antitrust probe now underway from European regulators that has materialized just a few weeks after the company was put under the United States’ Federal Trade Commission’s microscope.
Paypal Holdings (PYPL)
Loss since July 26th: -9.2%
It’s more often than not categorized as a fintech name, but let’s face it — without the internet, Paypal (NASDAQ:PYPL) wouldn’t be where it is today. The advent of wireless internet only makes that reality more true.
Granted, PYPL was at a great disadvantage at the end of July. Having been able to keep and even gain relevancy in the ever-changing payment space, PYPL stock was up a little more than 44% since the beginning of the year as of July 24th. But, its second quarter revenue fell short of expectations, creating just the excuse would-be profit-takers needed.
PayPal shares may be down 9.2% since the 26th, but the stock’s down 13.4% since posting its disappointing quarterly numbers.
Alibaba Group Holding (BABA)
Loss since July 26th: -11%
Just when it looked like Alibaba Group Holding (NYSE:BABA) stock was going to be able to turn things around following a rather rough 2018, an intensified trade war between China and the United States put BABA stock back on the defensive. Mirroring similar moves made by other internet stocks, Alibaba shares are off to the tune of 11% over the course of just the past few days.
Fear and presumption may be the only things actually working against Alibaba. Its microchip division designed its first computer processor, and a newly-forged partnership with Salesforce says the company is much more than e-commerce.
Right now and until further notice, traders don’t seem to care.
Loss since July 26th: -11.2%
Wayfair (NYSE:W) shares are down 11.2% since the S&P 500 reached a high on July 26th, but that’s only a drop in the bucket for the owners of this relatively young e-commerce player. W stock has fallen more than 28% after topping out in the middle of March.
Not even its second quarter revenue beat posted last week could end the selloff, as the company undermined that possibility by tacking on a lackluster third quarter outlook. Another, and bigger, loss certainly didn’t bolster the bullish argument.
Hopes have always been high for Wayfair, when it was founded in 2002 and then when it went public in 2014. It has just never convincingly demonstrated that it can profitably compete with more entrenched competition.
Loss since July 26th: -12.3%
There are perhaps no more internet-y internet stocks than those of companies that help individuals and corporations secure a domain for their website. That’s GoDaddy (NYSE:GDDY), which being in the wrong place at the wrong time has shaved 12.3% off of its value in just a few days.
Its second-quarter numbers didn’t help. Though revenue grew 13.1% to $737.2 million, the company swung to a loss of seven cents per share versus a profit of 11 cents per share in the same quarter a year earlier.
It’s possible the exit of CEO Scott Wagner weighed on investors’ minds as well. Though incoming CEO, former Expedia executive Aman Bhutani, is a skilled manager and internet veteran, now may not be the best time for such a disruption.
Loss since July 26th: -16.4%
As was the case with Alibaba, China’s smaller e-commerce player JD.com (NASDAQ:JD) is facing trouble on two different fronts. Not only is a slowdown in international trade crimping demand for, and supply of, some goods it normally handles, the subsequent economic slowdown in China is forcing some if its consumers to tighten their purse strings.
Still, if there’s only going to be room for one dominant e-commerce name in China if the feared global recession ends up taking shape, JD isn’t a name that has nearly the same muscle and resilience that its bigger rival can offer investors.
As of this writing, James Brumley held a long position in Alphabet. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley.