Question of the Day: Which of these 3 companies have seen their stock prices fall by more than 65% over the past year: Robinhood, Gap or Netflix?
Which of these stock market favorites are now on the "for sale" rack?
Hat tip to Jenny Trieu for the idea behind this Question of the Day and how it demonstrates the importance of diversifying your investments.
Answer: ALL of them
Questions:
- What emotions do you think an investor who owns one or more of these stocks might be feeling now? Do you think they would have held or sold as the stock price plummeted?
- Do you think owning a stock in one company is more or less risky than owning a fund that invests in 500 companies?
- Of the three companies listed, which do you think might have the brightest future?
Here are the ready-to-go slides for this Question of the Day that you can use in your classroom.
Behind the numbers (Robinhood, Gap, Netflix)
- Robinhood: Robinhood stock soared to an all-time high of $85 per share shortly after listing in August 2021, but it has since collapsed by 87% as the pandemic-driven retail investor frenzy dissipated. Now, Goldman Sachs is telling investors to sell Robinhood stock.
- Gap: Gap Inc. shares slid more than 18% Friday after the company slashed its sales outlook for the first quarter of fiscal 2022, citing what it called “execution challenges” its Old Navy business, and announced the CEO of that division, Nancy Green, will leave her post this week.
- Netflix: Shares of Netflix closed down more than 35% Wednesday after the streamer reported earnings Tuesday evening that showed it lost subscribers for the first time in more than 10 years.
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STAX is the #1 investing game to teach your students about the challenges of "beating the market" as they make 20 years of investment decisions in 20 minutes.
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This MOVE activity: Organize A Stock Market Index helps students understand what an index fund is.
About the Author
Tim Ranzetta
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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