U.S. equities are sliding lower this week as China pours some cold water on all those trade deal hopes, implying it is in no hurry to rush into a bad deal. The chatter is that Beijing wants a meaningful rollback in recent tariff increases; not merely a halt to new tariffs.
As a result, the major averages are pulling back slightly from their recent push to record highs.
But the bigger story is that sentiment is evaporating for all those recent ultra-hyped IPOs that attracted billions in market value from venture capital investors only to wilt under the spotlight of the public markets. Uber (NYSE:UBER) is the poster child for this, of course, as its post-IPO lockup period ends and insiders rush to sell.
There are other startups feeling the pressure too. Here are four of those stocks to sell.
The first IPO startup stock to sell is UBER. Uber shares are down 4% this morning to hit new post-IPO lows. This after reporting underwhelming results as insiders get the green light to dump their positions. The company reported a net loss of $1.2 billion for the quarter despite top-line growth as the ride share business steadfastly refuses to enjoy economies of scale.
Management is looking to achieve profitability by the end of 2021, largely on the back of food delivery, which is another ultra-competitive marketplace.
Video meeting service provider Zoom (NASDAQ:ZM) continues to test its post-IPO lows near the $60-a-share threshold, down some 40% from the high hit back in June. Shares have been under pressure as its own insider lockup period expired, clearing insiders to start dumping their positions into the open market. Can’t say I blame them, as Zoom takes on giants like Cisco (NASDAQ:CSCO) and Microsoft (NASDAQ:MSFT) in the telepresence space.
The company will next report results on Dec. 5 after the close. Analysts are looking for earnings of three cents per share on revenues of $156.2 million.
The in-office social media messaging service, Slack (NYSE:WORK), has been an unmitigated disappointment since IPO’ing back in June, grinding steadily lower as investors question the efficiency of letting corporate workers spend their day communicating via emojis and gifs. More than 50% of the post-IPO market value has been lost as a result with no end in sight.
The company will next report results on Dec. 3 after the close. Analysts are looking for a loss of eight cents per share on revenues of $156.2 million.
Video-equipped exercise bike maker Peloton (NASDAQ:PTON) is one of the stocks to sell that has seen their shares go nowhere fast since IPO’ing at the end of September. Investors realized the effective market size for expensive workout machines isn’t as large as many believed.
As the company continues to burn cash, while claiming it could pullback on growth and post a profit tomorrow if it wanted, its CEO John Paul Foleyon told CNBC on Tuesday the company’s share price decline was a “head scratcher.” Color me amused.
Shares of SmileDirectClub (NASDAQ:SDC), which sells transparent teeth aligners through the mail, are down roughly 40% from their post-IPO high as the company faces intense competition from Align Tech (NASDAQ:ALGN) as well as traditional orthodontic providers. Moreover, California recently passed a law requiring teeth straightening services to do a preliminary x-ray or digital diagnostics on patients — which will add time, expense, and hassle to SDC’s business model.
The company will next report results on Nov. 12 after the close. Analysts are looking for a loss of 87 cents per share on revenues of $165.3 million.