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May 29, 2022

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Five Imploding $40 Billion Companies Are Shadows Of What They Were

If you feel poorer following the S&P 500’s sell-off, just know it could be worse. Much worse. Investors who piled into some $40 billion companies are suffering as nearly all that wealth vanished.




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Five stocks in the S&P 1500 or S&P Completion Indexes that topped out with whopping market values of $40 billion or more last year, including Teledoc Health (TDOC), Zillow (ZG) and Peloton Interactive (PTON), are now a fraction of their former selves, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All are now worth well less than $10 billion, or more than 70% less.

Such massive implosions of market value are emblematic of what’s going on in this S&P 500 sell-off. Stocks with over-the-top valuations are getting viciously repriced in an epic markdown.

“No one can confidently answer the question of when stocks will hit the bottom, but if the options market is the primary focal point for many traders, that could suggest downward pressure on stocks could last a while longer,” says Edward Moya, strategist at Oanda.

S&P 500 Wreckage Everywhere

The S&P 500’s 18.3% drop from the high may not sound like much. After all, that’s not even bad enough to qualify as a 20% bear market. But that’s masking the massive wealth destruction going on.

All investors as a group are now down more than $10 trillion this year, says Wilshire Associates. And some big names account for a bulk of those losses. The largest loss in market value from the all-time high is Amazon (AMZN). Shares of the online retailer shed a remarkable $766 billion in market value from its all-time high on July 13, 2021. That’s a 43% drop in market value.

And some are concerned, too, Apple (AAPL) is getting dragged in as well. Apple investors lost $638 billion in market value, or 22%, from their all time high on Jan. 4, 2022. “It is a troubling sign when investors sour on best of breed names in an already difficult tape,” said Nicholas Colas of DataTrek Research.

But those drops are merely a flesh wound compared to the market’s biggest reversals of fortune.

Peloton, Teladoc Inflict A World Of Hurt

Think keeping up with Peloton instructors is painful? Try owning the stock.

Shares of Peloton topped out with a massive $45.4 billion market valuation on Nov. 18, 2021. The stock hit 176.65 on that day as it looked like people would ditch their gyms and workout at home. But now it’s the Peloton investors who are sweating and perhaps hoping for a buyout. The company’s market value shriveled nearly 90% from the highs to be worth just $4.6 billion now, or 13.83 a share.

Furthermore, investors don’t have any fundamentals to lean on. The exercise bike company is expected to lose upwards of $3 billion dollars, or nearly as much as the entire company is worth, over the next three years.

It’s a similarly dire situation over at online health firm Teladoc. This is a company that was valued at north of $42 billion when it peaked out on Feb. 16, 2021. But its value has sunk nearly 90% since then to just $4.9 billion. And again, analysts sees losses as far as the eye can see. The company is expected to lose $233 million in 2022, $201 million in 2023 and $98 million in 2024.

And then there’s the epic fail of online housing listing company, Zillow. Disastrously poor business decisions prompted the company worth $48 billion in February 2021 to drop to just $9.2 billion now.

But won’t these fallen heroes bounce back? Don’t count on it. The Gap (GPS), Xerox (XRX) and Juniper (JNPR) were also all formerly worth more than $40 billion roughly two decades ago. All of them are worth less than $10 billion today.

Ouch! Fallen $40 Billion Companies

Companies peaked at $40 billion or more since 2020 all worth less than 25% of that now

Company Ticker Market value in $ billions at (all time high) Market value now ($ billions) % lost from all time hi Sector
Zillow Group (ZG) $48.4 (Feb. 16, 2021) $9.2 -82.4% Real Estate
Peloton Interactive (PTON) 48.3 (Jan. 14, 2021) 4.6 -92.0 Consumer Discretionary
Affirm Holdings (AFRM) 45.4 (Nov. 8, 2021) 5.1 -89.8 Information Technology
Teladoc Health (TDOC) 42.2 (Feb. 16, 2021) 4.9 -90.0 Health Care
UiPath (PATH) 41.7 (May 28, 2021) 8.3 -83.0 Information Technology
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz

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