Zoom, Peloton and Pandemic-Fueled Stocks Drop on Vaccine Report

Zoom Video, Peloton, Netflix and other stocks that benefited from pandemic lockdowns dropped after Pfizer reported vaccine progress.
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Zoom Video (ZM) - Get Report, Peloton (PTON) - Get Report, Netflix  (NFLX) - Get Report and other stocks that have soared because of the coronavirus pandemic dropped on Monday as Pfizer  (PFE) - Get Report reported progress with a vaccine.

Pfizer said its vaccine was 90% effective in late-stage trials and that later this month it planned to seek emergency-use authorization from the Food and Drug Administration.

The San Jose, Calif., videoconferencing platform provider Zoom fell 13% to $434.30 in recent trading. But it remains up by a factor of more than six in 2020 to date. It benefited from people who were stuck at home and used its service to communicate with co-workers, friends and family.

Connected-fitness company Peloton, New York, slid 16% to $106 in recent trading. The shares nonetheless have more than tripled year to date. Peloton enjoyed major usage from those who were shuttered in their homes but wanted to stay in shape.

Video-streaming titan Netflix, Los Gatos, Calif., slipped 7.8% to $474.83 in recent trading. It has gained 46% year to date, as people looked for on-demand video content.

“Stocks like Zoom and Netflix will be long-term winners but will lose in the short term as their valuations ran ahead of actual earnings,” said James McDonald, chief executive of the Los Angeles firm Hercules Investments.

“We have likely already seen peak levels of adoption and revenue in the short term, and the trajectory of these stocks will reverse now that there is a vaccine and a probable return to normalcy, even if that return is gradual. 

"We want to go back to work, school, and socializing in business and family life, and this means a slowdown for most stay-at-home stocks.”