Meta, Coinbase among US stocks that hurt investors most in ’22

Bloomberg

It’s been a year of historic selloffs for US equities.
Marked by surging inflation, jumbo-sized interest rate hikes, a darkening outlook on corporate earnings and recession clouds, the S&P 500 Index has lost 21%, on pace for its biggest slump since 2008. From crypto to former pandemic winners and so-called Faang stocks, investors have been shaken out of their profit euphoria, sometimes in the blink of an eye.
For those who trod in the wrong places, the outcome has been painful. About half of a $9.1 trillion rout in the S&P 500 Index was the doing of just six megacaps: Amazon.com Inc., Apple Inc., Alphabet Inc., Microsoft Corp., Tesla Inc. and Meta Platforms Inc., each of which erased between $632 billion and $908 billion of market value.
The Faang’s — Facebook, Amazon, Apple, Netflix Inc. and Google — had it bad this year as surging bond yields prompted investors to flee stocks with the highest valuations.
Yet it was the former, renamed Meta, that suffered most, falling 66% to date. The Facebook owner had the worst day in its stock market history on Feb. 3 when it lost an estimated $251 billion in market value after posting disappointing earnings.
To that can be added regulatory and legal risks, cutbacks from advertisers and a crackdown on targeted ads by Apple. Plus, Chief Executive Officer Mark Zuckerberg’s bet on virtual reality through the metaverse has cost the company billions and isn’t expected to turn a profit anytime soon.
Still, analysts are looking to a revival in 2023, with the majority having buy ratings and the average price target implying 26% potential upside.
It’s been a disastrous year for stocks with exposure to cryptocurrencies as digital tokens were pummeled by a series of blowups, including the collapse of a so-called stablecoin in May and the unravelling of the FTX crypto exchange in November.
And as the largest public US crypto exchange platform, Coinbase has been among the hardest hit as investors yank coins off exchanges or exit the asset class as a whole. This year’s 87% plunge in the stock has wiped out about $47 billion in market value.
Owning Coinbase shares is “making a bet on the whole crypto token ecosystem,” according to Dan Dolev, an analyst at Mizuho Securities who has an underperform rating on the stock. “You’re better off just owning Bitcoin, if you believe in Bitcoin,” he said.
Not all analysts are so gloomy, with the average price target implying that the stock will more than double in the next 12 months.