Mayhem Beneath the Surface of the Stock Market | Wolf Street

Each stock that crashes has its own story for the crash. What they have in common is that they were all ridiculously overvalued, and investors knew it, and they kept hanging on till the last moment to ride them up all the way, but they were sitting all bunched up near the exits, and when the signal came, they all rushed out together, causing those shares to collapse. But even at those much lower valuations, those stocks are still ridiculously overvalued.

Zillow had some good news, well sorta, on Friday by promising a big share buyback as it is unwinding its house-flipping business and selling the thousands of houses it got stuck with largely to institutional buyers. Upon the announcement, Zillow’s shares [ZG] jumped 10% on Friday, which whittled down their collapse since February to 71%.

Moderna [MRNA] has plunged 38% since the peak in August 2021, including a 31% two-day collapse in early November.

Zoom Video [ZM] has plunged 67% from the peak of $568 on October 19, 2020 to $183.92 on Friday. The descent included a 16% plunge on August 31, followed by a little dip-buying, followed by massive drops. Despite this massive haircut, the stock still trades at a ridiculous 15 times revenues.

Mayhem Beneath the Surface of the Stock Market | Wolf Street