Crypto and tech stocks are plummeting. What that means for your investments
Global News
Tech stocks such as Shopify have seen their values drastically drop in the past few months. Here's how the changing market might be affecting your portfolio.
Early on in the COVID-19 pandemic, rising tech star Shopify became Canada’s most valuable company, beating out established player Royal Bank of Canada for the top spot.
But in the past six months, shares of the Ottawa-based e-commerce giant have lost nearly 80 per cent of their value on the Toronto Stock Exchange.
So what went wrong?
The company reported last week it’s still increasing revenues, but that growth was the slowest of any quarter since going public in 2015. Its profits also missed analyst expectations. That same day the company announced the biggest acquisition in its history, a $2.1-billion purchase of a logistics company, as it plans an expansion to its fulfilment network.
“We see the current market landscape unwilling to reward high-growth companies like Shopify looking to sacrifice all profits at the expense of growth,” CFRA analyst Angelo Zino said last week.
Shopify isn’t alone.
Technology giants including Netflix and Facebook parent company Meta — companies that, like Shopify, saw massive gains during the pandemic — have seen their valuations plummet since the start of the year.
The tech-heavy Nasdaq composite’s loss of 25.7 per cent for 2022 so far is much sharper than that of other indexes.