CNBC’s Jim Cramer warned investors on Friday that shares of new companies that had been hugely successful in the pandemic would continue to fall, and this may just be the beginning.
“When your shares have no dividend support and no reasonable valuation on the profit side, assuming it also has a profit, there is no floor in this market. If you ask yourself, how much can it go down? The answer is. It’s almost always lower,” said Mad Money .
“Never confuse a big drop with a bottom. They are not synonymous,” he added.
Stocks fell on Friday after May’s consumer price index showed warmer-than-expected inflation figures.
Among the shares that fell today were Stitch Fix and DocuSign, two of which Cramer has highlighted as two names that show his warning against investing in earlier flights.
Shares of Stitch Fix, as the pandemic rose as consumers shifted to online shopping, fell 18% on Friday, after the company announced releases on Thursday and said it expected revenue to decline in the fourth quarter.
The company reached a new 52-week high of $ 6.18 on the same day, reaching a 52-week high of $ 64.52 a year earlier.
Another pandemic winner, DocuSign, fell 24% in its last quarter after losing Wall Street earnings and earnings expectations.
The company also hit a new 52-week low of $ 64.30 a day, far short of the 52-week high of $ 314.76 last August.
“These new shares, which have been around for the last three, four, five years, have been extremely expensive before the peak … maybe even before they were marketed, so as their business deteriorates, they can fall far, far away. before you find it, ”Cramer said.
Despite the hard fall of DocuSign, he added that he still doesn’t think the stock is cheap enough to buy. As for Stitch Fix, the shares are intangible until the company’s main business is stabilized, he said.
“We don’t care where those former markets have been … We only care where they go,” he added.
Sign up now CNBC Investing Club to track all of Jim Cramer’s market movements.
Nothing prevents former “market favorites” from going down, Jim Cramer warns
Source link Nothing prevents former “market favorites” from going down, Jim Cramer warns