Categories Analysis

2020 was not kind to these three stocks, find out why

The lawsuit alleges that Facebook misused its dominant position to stifle competition

The year 2020 was both unusual and quite eventful thanks to the COVID-19 pandemic. Some companies benefited from the health crisis as stay-at-home orders drove growth for their business while others suffered as their operations were disrupted. However, the year was particularly tough for these three stocks.

Nikola

Nikola Corporation (NASDAQ: NKLA) had a tough time in 2020 dealing with fraud allegations made by activist short-seller Hindenburg Research. These allegations led to investigations by regulatory agencies and the subsequent exit of founder and executive chairman Trevor Milton.

Prior to this incident, Nikola had struck a partnership with General Motors (NYSE: GM) under which the latter was to take a stake in the EV-maker and team up to produce its Badger pickup truck. The deal was seen as a game-changer for Nikola at the time but following the aforementioned allegations and the leadership change, it was sizeably cut down.

GM and Nikola subsequently entered into a supply agreement under which the previously proposed stake and Badger alliance were dropped. This came as a huge hit to Nikola and the Street turned pretty much pessimistic on the company’s prospects. The stock has dropped 49% over the past three months.

Facebook

Facebook Inc. (NASDAQ: FB) had its fair share of controversies this year too. The social media firm faced an advertising boycott earlier in the year when several major companies announced that they would halt their advertising on the platform for its failure to tackle hate.

The pandemic also led to several companies reducing their advertising budgets and this trend was expected to impact digital advertising in general but Facebook was not impacted much. The company continued to post strong advertising revenues through the year.

After emerging from the boycott, Facebook was hit by an antitrust lawsuit by regulatory agencies in the US. The lawsuit alleges that Facebook misused its dominant position to stifle competition and the agencies have proposed splitting up the company to tackle this issue.

If this proposal goes through, Facebook will have to let go of its Instagram and WhatsApp divisions, both of which are massive growth drivers. Facebook is preparing to fight this lawsuit hard with the intention of keeping the company intact.

Carnival Corporation

Cruise company Carnival Corporation (NYSE: CCL) suffered extensively due to the pandemic as it had to halt its cruises for the most part of the year. The company continued to incur losses during the first three quarters of this year and even though it resumed limited guest operations in September, it is still far from a complete recovery. The stock has plummeted 57% since the beginning of the year.

Click here to read the full transcripts of latest earnings calls

Most Popular

Electronic Arts (EA) Q1 2022 Earnings: Key financials and quarterly highlights

Electronic Arts Inc. (NASDAQ: EA) reported first quarter 2022 earnings results today. Total revenue increased to $1.55 billion from $1.45 billion in the same period a year ago. Net income

Earnings: Roku swings to profit in Q2 as revenues surge; results beat

Roku, Inc. (NASDAQ: ROKU) on Wednesday reported profit for the second quarter of 2021, compared to a loss last year, even as the streaming services provider further expanded its user

Activision Blizzard Stock: Why ATVI is a good pick in COVID era

There has been a steady increase in the consumption of online content ever since the coronavirus forced people to stay indoors. Activision Blizzard, Inc. (NASDAQ: ATVI), the maker of popular

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top