Last Friday (December 8th), NASDAQ announced the annual adjustment results of the NASDAQ 100 index, adding 6 stocks to its constituent stocks while excluding 6 companies.
It is understood that the Nasdaq 100 Index tracks the 100 largest and most active non-financial companies listed on this exchange, and is an important indicator for measuring the performance of the technology industry and other growth industries on a global scale.
Therefore, companies included in the NASDAQ 100 index can improve their liquidity and attract a wider range of investors through index funds. Correspondingly, the expulsion of constituent stocks from the index may have a negative impact on the company's stock prices and liquidity.
In this annual adjustment, the excluded constituent stocks include the cross-border e-commerce platform eBay A well-known photovoltaic inverter company, such as Energy Energy, and another name, Zoom Video Communications, Inc., became popular throughout the world during the COVID-19.
In 2020, in the early days of the COVID-19, the video conference service of Zoom was regarded as the savior by enterprises, and its user volume expanded rapidly while its share price rose all the way. In April of that year, the company was included in the NASDAQ 100 index; In September, Zoom's stock price reached a new high of $588 per share, with a market value approaching $160 billion at one point.
But as the epidemic stabilized and offline work returned to normal, Zoom's revenue significantly slowed down, and its stock price also fell from its peak to around $70, reaching a low of $58 per share, only one tenth of its peak. At the beginning of the year, the company announced a global layoff of 13000 people, accounting for 15% of the total number of employees.
From Zoom's case, it can be seen that the "epidemic dividend" is like a dose of adrenaline: it takes effect quickly and has sufficient strength, but after the medication is strong, symptoms such as physical fatigue may appear. For the company, it is to concentrate on absorbing the users and income that should have been accumulated for a long time for more than a year, leading to fatigue in subsequent growth.
In addition to Zoom, typical cases with this symptom include Netflix, a streaming media giant, Peloton, a home fitness equipment manufacturer, and Pfizer, a COVID-19 vaccine developer.
At the beginning of the COVID-19, offline entertainment activities were restricted, and online entertainment demand surged. In 2020, Netflix had a net increase of 37 million paying users, a record growth. In 2021, the number of paying users continued to grow by 18 million, and the stock price reached a historical high of $700 per share.
But in 2022, Netflix experienced its first loss of paid users in the first quarter, making it the worst quarterly financial report in a decade, which dealt a heavy blow to its stock price. In less than half a year, Netflix plummeted to $162 per share, although not excluded from the NASDAQ 100 index, it has become the fastest to fall behind among FAANG.
The same goes for the fitness industry's Netflix, where Americans living at home purchased Peloton's "dynamic bikes", resulting in the company's sales growth of over 230% in the 2020 fiscal year. To address supply chain bottlenecks, Peloton also acquired fitness company Precor and its production capacity in the United States in order to accelerate delivery.
However, the good times of the epidemic dividend were not long. As of the end of March 2022, Peloton had a serious inventory surplus, with a net loss of over 750 million US dollars. In June of the same year, the company's net loss for the whole year reached 2.8 billion US dollars. Last year, Peloton closed a large number of retail stores and went through four layoffs to get through the difficulties, but its stock price has plummeted from its peak of $171 to around $5.6 now.
Another thing that must be mentioned is Pfizer. Benefiting from the promotion of COVID-19 vaccine and oral medicine business, Pfizer even once ranked first in the market value of pure pharmaceutical enterprises. But as of yesterday's close, the company's market value has dropped from a historical high of $330 billion to around $160 billion, slipping from TOP 1 to the current ninth place.
The sales performance of Pfizer's non COVID-19 products was not outstanding, but fortunately, the company obtained a large amount of cash through the epidemic. As of the mid report of 2023, Pfizer's cash and short-term investment on its books totaled $44.7 billion. Compared to that, the current top 1 Lilly has less cash than Pfizer's fraction.
Under these conditions, Pfizer has shifted its strategy to acquiring other pharmaceutical companies to boost sales. In March of this year, Pfizer spent $42 billion to acquire cancer therapy developer Seagen, and the company expects Seagen to contribute over $10 billion in revenue to Pfizer by 2030.