- Positive developments in the race to a COVID-19 vaccine sent shares of stay-at-home stocks like Netflix plummeting on Monday.
- Netflix itself fell as much as 9%, even as major indexes like the S&P 500 and Dow Jones industrial average soared to record highs.
- The streaming giant saw a spike in subscribers due to the COVID-19 pandemic as consumers searched for entertainment alternatives amid the stay-at-home orders.
- Watch Netflix trade live here.
The vaccine developed by Pfizer and BioNtech was evaluated in a phase 3 trial with more than 44,000 patients. No serious safety concerns were observed during the trial. Pfizer expects to manufacture up to 50 million doses of its vaccine by the end of the year, and up to 1.3 billion doses in 2021.
A positive COVID-19 vaccine has wide ranging implications for the stock market, as certain sectors benefited from the news while others floundered.
The biggest losers from the vaccine development news were the stay-at-home stocks that flourished amid the near one-year long pandemic, even as major indexes reached record highs on Monday.
Specifically, Netflix did well as it added a record number of subscribers to its video-streaming platform as consumers searched for new forms of entertainment amid stay-at-home orders swept across states throughout the Winter and Spring months.
But Monday’s news sent shares lower as investors may now question whether Netflix’s success amid the pandemic is sustainable.
The company raised its monthly subscription prices by $US1 late last month as it argued that its surge in content spend justified an increase in prices.
But the selling in Netflix stock may be premature, as a survey released in August suggested that many of Netflix’s customers will likely stick around after the pandemic is over.
Netflix isn’t the only stay-at-home stock that suffered on Monday. Shares of Zoom dipped as much as 20% as a positive COVID-19 vaccine will likely hasten the return of employees to offices, reducing reliance on the video communications platform.