They're down 70% since the start of the year and investors keep selling
At the opposite end of this year's performance tables, a quiet but ruthless sell-off is underway. Some stocks have lost over 70% of their value since January, and even after such a drop, buyers are not returning. They share a combination of deteriorating fundamentals, repeated disappointments, and a loss of confidence that investors are not yet daring to test again. Why does the market continue to punish these companies, and can anything at all be found in the ruins of their valuations?
Key points
Three stocks have lost roughly 70% of their value since the start of the year. Yet investors are not coming back. What could be so serious that even a huge drop is not enough?
Not long ago, some of these companies were growing at double-digit rates. But within a few months, their investment stories changed dramatically.
The same drop, but three completely different problems. The difference between a temporary crisis, structural decline, and existential risk can decide the future of an entire investment.
Even a stock that has already lost 70% may not be cheap. Further margin deterioration, customer losses, or the need for new capital can cause more significant losses.
When does a falling knife become an investment opportunity? For each of these three companies, there is a specific indicator that could first signal a real turnaround.
A 70% drop in less than ten months is usually associated with companies on the verge of bankruptcy. But reality is more varied. Among this year's biggest losers, we also find companies that were still growing at double-digit rates last year, were profitable, and were building a strong brand. The problem often lies not in the existence of the business itself, but in the fact that within a few months, the assumptions underlying its valuation changed fundamentally.
For investors, such cases are interesting in two ways. They help recognize early the mechanism by which a growth story becomes a trap, and a deep drop sometimes opens room for an asymmetric bet, when most negative scenarios are already priced in. The key is to distinguish a stock that is truly cheap from one that only looks that way.
In today's analysis, we will look at three names from food, streaming, and the automotive industry. Each has lost about 70% of its value since the start of the year, yet selling pressure continues. We will analyze what is behind the drop, how management is responding, how strong the company's balance sheet is, and what milestones could decide the stock's next direction in the coming months.