The week may be drawing to a close, but the stock market is not slowing down. Today, the focus was largely on online brokerage Robinhood (NASDAQ:HOOD) as it made its public debut. After opening at $38, shares struggled, ultimately closing down 8.4%. So beyond watching HOOD stock — and some of its first price targets — what did the stock market do today?
- The S&P 500 closed up 0.42%
- The Dow Jones Industrial Average closed up 0.44%
- The Nasdaq Composite closed up 0.11%
So what else did the stock market do today? Here are some of the top stories.
What Did the Stock Market Do Today? Sell Nikola.
The saga for once-red-hot Nikola (NASDAQ:NKLA) continued on Thursday, with shares dropping 15%. The slump came after federal prosecutors filed securities fraud charges against Trevor Milton, the founder and former chief executive. Milton has been charged with misleading investors around the technological capabilities of Nikola.
There are several things for investors to note here. The first is that the prosecutors single out the impact on retail investors, particularly those that use the Robinhood platform. The second is that the charges include, among other things, messages from Milton on social media that overhyped Nikola.
Nikola, like many other electric vehicle startups, came public through a reverse merger with a special purpose acquisition company. Milton promised to rival Tesla (NASDAQ:TSLA), moving to electrify the heavy-duty truck space. He also began to tout the Badger, an all-electric pick-up truck rivaling the Cybertruck and at one point, relying on a partnership with General Motors (NYSE:GM).
Then, things started to fall apart. Hindenburg Research came out with an iconic short report, alleging that Milton & Co. falsified what the Nikola prototypes could actually do. Then, the company had to confirm that the prototype was not in fact functioning; a promotional video simply showed the truck rolling down a hill in neutral.
With prosecutors officially rolling out charges, it begs to question what the future holds for other electric vehicle startups. Several of these companies came public with nothing but big ideas and personable founders, a combination that in one point in 2020 was irresistible to investors.
While peer Workhorse (NASDAQ:WKHS) tried to turn things around today through announcing a new CEO, the road ahead is not smooth. In fact, the latest infrastructure deal cut funding for EVs by 90%, dampening that catalyst.
The Case for Mental Healthcare Stocks
As Dan Primack wrote in Axios this morning, the stories of high-profile athletes like Simone Biles and Naomi Osaka show that the line between physical and mental health continues to blur. In the venture capital world, this is a reason to keep spending.
Beyond individuals with great influence sharing their mental health struggles, a number of factors have combined to thrust mental healthcare into the spotlight. Covid-19 brought an increase of reports of depression and anxiety. Consumers started searching for mental healthcare providers at record levels. Telehealth, and its inclusion of psychological and psychiatric care, became more accessible. New legislation made it harder for insurance companies to deny mental healthcare coverage.
Through it all, startups in the mental health space started to see record funding. As Primack put it, Covid-19 simply exposed a gap in the healthcare system. The startups that aim to fill those gaps saw — and will continue to see — a big rush of money.
In the first quarter of 2021, venture capital investments in mental health startups rose 72.6% year-over-year.
So how do you invest in this reality? While startups like Lyra Health are drawing attention, there are also a handful of worthy options in the public markets. Teladoc (NYSE:TDOC), an innovator in telemedicine, is one option. Then there is Talkspace (NASDAQ:TALK), a mobile therapy platform. Benzinga also recommends emerging psychedelics companies like Compass Pathways (NASDAQ:COMP) and MindMed (NASDAQ:MNMD) as plays in this space.
It seems that as conversations become more transparent and individuals better their understanding of mental health, demand for care will only grow… and VCs are putting their money behind that logic.
What Else We’re Watching
- Pfizer (NYSE:PFE) may be generating buzz around Covid-19 boosters, but the vaccine maker is not alone. Today Vaxart (NASDAQ:VXRT) shared that a second dose of its oral vaccine candidate successfully boosted immune responses in recipients. As investors look to digest what the Delta variant means for the market, we could see a meaningful return to underdog vaccine plays.
- Bryan Walsh wrote for Axios that similarly, the Delta variant could finally be the catalyst needed to bring about widespread, frequent testing. You can read more about the case for a renewed spike in daily testing here.
- Importantly, Covid-19 has not just been a boon for the biotech space. Since the start of the pandemic, money has flown into trends like e-commerce and contactless payments as consumers and businesses adapted to a new normal. Now, a new report shows exactly how much money went into these trends. In the first half of the year, payments startups raised a record $5.56 billion, with companies Klarna and Mollie leading the way.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.