...if you look at that list of stocks that have crashed from their all time highs, it is not that they didn't produce revenues, it is not that they didn't get somewhere in the market, they all did
BUT
...they have had such a meteoric share price rally that even after a -90% fall from peak, they are still expensive. The major reason why they have had such a huge fall despite posting very decent revenues is because at the height of exuberance, market participants felt these stocks were going to take the world by storm, with their offerings and imputed very high double digit y-o-y growth.
...but as time progressed, the hype faded as they could not meet the high growth expectations.
...Beyond Meat, as an example, revealed q-o-q negative revenue growth despite churning $300+ million annual revenues, their annual losses were also $300m, and yet after losing -90% of stock value, its market cap is still at $460million. Price/Sales at just 1.5x which is about appropriate.
...all suggest that at the height of the hype a stock experiences, when all holders were expecting huge gains, the price had already factored those lofty expectations. More often than not, expectations are not met or somehow delayed and stock price falls back in a steeply fashion.
...it is a note to holders to sell at the time when exuberance was high and not be the last one entering to possibly hold the bag thereafter.
