Last year was quite the year in the stock market. Markets performed exceptionally well, as each major index outperformed the average growth expected each year. Since the 1990s, the S&P 500 index, an accurate measure of how the stock market as a whole is doing, has had an average increase of about nine percent each year. With that being said, this year, the return for the S&P 500 sits right above 25 percent. This is well over the average year and signifies a great year in the market. However, there were also many stocks that performed miserably in their returns for the year, disturbing investors everywhere. The Russell 1000 index is a stock index that is composed of the top 1,000 stocks by market cap and accounts for over 90 percent of the whole market. Therefore, it can be used as a helpful representation of the overall market, and reveal the companies weighing the index down. So, here are the bottom four most notable low-performance stocks Year-To-Date (YTD) based on their YTD returns in the Rusell 1000 index.

1. Peloton Interactive, Inc. (PTON)

• YTD Return: -73.15% (-106.77)
• Market Cap: 12.81B
• Sector: Consumer Cyclical[1]

Peloton Interactive, Inc. is a fitness company that offers stationary bikes with large touchscreens and online workout classes that owners can enjoy via online subscription. In 2020, Peloton had an immensely successful year, climbing over 400% during the COVID-19 pandemic, as Pelton served as a way for people to workout at home while gyms were closed. However, this year, Peloton has simply had a terrible year. First, Peloton had to recall its treadmills after reported injuries and death, which slowed their sales. In response, Peloton tried to lower the price of its stationary bikes in an effort to promote sales. However, this worried investors everywhere and was a major red flag to them. Secondly, as the severity of COVID settled down, gyms reopened and the sales of Peloton bikes significantly dropped. In addition, Amazon (AMZN) launched a new digital fitness platform, which introduced major competition against Peloton and further plunged Peloton’s stock. The earnings reports throughout this year have just been plain terrible, which then concerned many investors. 

2. StoneCo Ltd. (STNE)

• YTD Return: -80.61% (-66.64)
• Market Cap: 4.95B
• Sector: Technology[1]

StoneCo Ltd. is a financial technology company that deals with a cloud-based digital transaction platform based in Brazil. Its first big mistake this year was that it invested 4.99% stake in a Brazilian bank called Banco. StoneCo did this in an attempt to get its clients involved in their financial technology. However, after the Brazilian government suffered massively, so did Banco. Other issues that affected StoneCo throughout 2021 correlate with Brazil’s economy. According to The Motley Fool, “The road to recovery could be tenuous for Stone stock. Brazil’s economy could be headed back into recession… Early estimates from the central bank’s economists indicate Brazil’s economic growth will be sluggish at best in 2022.” This year, Brazil’s inflation rate is over 10 percent which is a major warning sign for investors. Other factors, including high unemployment rates and the threat of COVID, are a few of the many reasons why many are nervous to purchase Brazilian stocks. 

3. Zillow Group, Inc. (ZG)

• YTD Return: -56.00% (-76.45)
• Market Cap: 15.47B
• Sector: Communication Services[1]

Zillow Group is a digital real estate company that is used by homeowners and buyers to provide real estate data. During 2020 and throughout the pandemic, Zillow Group, Inc. stock soared as the real estate market was booming, growing over 200% in the year of 2020. However, at the price shares were selling for, it highly overvalued the company and many investors wanted to pull out, as they didn’t agree with Zillow Group’s valuations. In addition, Zillow Group’s home-flipping business, iBuying, had to be paused due to supply chain issues throughout 2021. Specifically, Zillow had many issues with obtaining supplies for its iBuying business and its CEO thought it would be best to pause. This, however, only concerned investors. Moreover, as this year has had very low interest rates, meaning a roaring housing market, real estate companies like Zillow are meant to do very well. However, the dropping in Zillow share prices really concerned investors throughout the year. 

4. Acadia Pharmaceuticals Inc. (ACAD)

• YTD Return: -55.41% (-29.26)
• Market Cap: 3.79B
• Sector: Healthcare[1]

Acadia Pharmaceuticals Inc. is a biopharmaceutical company that focuses on producing pills for neurological system disorders. The main cause for its plunge in the stock market this past year is primarily due to the FDA (Food and Drug Administration) rejecting its main pill, Nuplazid. This drug has been in the trial stage for many years, and this is the second time it was rejected by the FDA. Specifically, the FDA “identified deficiencies” within Acadia Pharmaceuticals’ product. Right after this news was released, Acadia Pharmaceuticals stock tanked roughly 40%. Since then, the Acadia Pharmaceutical company stayed at a considerably low price as investors were frantic over the news. Many are doubtful and are scared to jump back this stock. Forbes stated: “There’s obviously a ton of opacity here and ACAD hasn’t been able to follow up with FDA, but the bottom line is we think [dementia-related psychosis] approval is unlikely.”

2021 was an astounding year in the market, regardless of the numerous companies that experienced great failures. The companies mentioned are definitely ones to keep an eye on to see if they can recover from their ongoing losses in the market. We just have to wait to see what 2022 is going to bring.

***Disclaimer: All information mentioned in this article is as of Saturday December 18, 2021.

***All Stock Market Data is sourced from Google Finance.

[1] As per Yahoo Finance