The 10 worst-performing stocks of 2022

January 8, 2023 8:33 PM

Some of the worst-performing stocks of 2022 are household names. From retailers to biotech firms to a crypto exchange, the laggards of last year got hammered as inflation kept advertisers and consumers at bay, higher interest rates made borrowing money for operations more expensive and COVID-fueled bottlenecks gummed up supply chains. Throw in Americans deciding that they have enough fluffy throw pillows and realizing they really like beef, and these shares got slammed.

It's a cautionary tale for wealth advisors with clients who are emotionally attached to certain stocks — and to institutional investors who pile in.

Aaron Klein, the CEO of Riskalyze, which makes risk management and compliance software for the wealth management industry, said that financial advisors deal all the time with customers who own individual stocks for sentimental reasons.

"While it can be relatively easier to convince clients to sell that losing stock, it's not long ago that advisors had an even tougher problem — getting them to sell the winning stock that is making them $10,000 a month," he said.

Scroll through our slideshow of the worst performers of 2022. All data is from Morningstar.

Beyond Meat

When it went public in 2010. the plant-based food company — a byword for vegan hamburgers — scored Snoop Dogg and Leonardo DiCaprio as spokesmen and inked deals with national restaurant and supermarket chains. Since then, rivals have cut into its market share and consumers have cooled it on plant-based meat. Last September, the company's chief operating officer was arrested after allegedly biting a man's nose.

Twilio

Twilio, a maker of cloud-based software, slashed its growth expectations last fall after rosy forecasts earlier in the year. The company, whose software lets companies talk to customers through messaging, email, voice, WhatsApp and video, soared early on during the pandemic as consumers stayed home, but now says it tried to grow too fast.

Roku

The streaming company, one of several "cord cutters" that allows viewers to bypass traditional cable TV costs, has been pummeled by a slump in digital advertising — its main revenue source — as inflation cuts into the dollars companies spend to promote themselves. Supply chain hangups in the pandemic economy have also pressured availability of its streaming devices

The company already makes streaming boxes, operating systems that power others' smart TVs, and dongles — those little adaptors that plug into your computer's USB drive — and now plans to launch its own branded smart TVs.

Roku also faces stiff competition, from Amazon, NBC's Universal's Peacock and Hulu. Last November's "Weird: The Al Yankovic Story," became its most-watched video-on-demand ever.

CureVac

CureVac, a clinical-stage biopharmaceutical company in Germany, makes mRNA vaccines to fight COVID and the flu, but its share price is ailing. While preliminary trials of its vaccines this month looked promising, one analyst called the company's omission of data for older adults "half-baked." CureVac ditched its its first mRNA COVID vaccine in 2021 and after dismal results earlier this year and shifted focus to a product with GlaxoSmithKline.

Wayfair

Following a spectacular rise at the start of the pandemic, as Americans stayed home and ordered blankets, pillows and sofas from the online furniture retailer, Wayfair has just what you don't need: a stock price hammered by waning sales and net operating losses. Consumers have redecorated to the rafters, and persistent inflation is redirecting money to essentials like food and rent.

Farfetch

Farfetch, a leading e-commerce marketplaces for luxury goods, has suffered from geopolitics, with the COVID-driven lockdown in China dealing a blow to one of its major markets and Moscow's invasion of Ukraine last March putting a ground stop to its Russian business.

With shareholders including Chanel and Richemont, a conglomerate of luxury watches, jewelry and fashion, the company has also suffered from a decline in consumer spending in the U.S. and Europe. "We recognize that FTCH is a show-me story, but we believe the company continues to become a more valuable partner to the global luxury industry," J. P. Morgan analyst Doug Anmuth wrote last month.

Coinbase Global

Coinbase calls itself "the most trusted crypto exchange," but investors have punished it in the wake of FTX's collapse last November and founder Samuel Bankman-Fried's indictment last month. Knock-on effects of the Great Crypto Meltdown of 2022 include subsequent bankruptcy filings by digital asset lender BlockFi and Three Arrows Capital, among others. This month, Coinbase reached a $100 million settlement with New York regulators over questionable practices.

The RealReal

An online marketplace for consigned luxury goods from pre-loved Chanel handbags to Jimmy Choo heels, The RealReal has been anything but bougie for investors. Brokerages including Raymond James and Wells Fargo downgraded tin recent months the stock, a favorite with institutional investors including BlackRock and Vanguard Group. Citing missed earnings targets and dwindling cash, Seeking Alpha says that "with rising recession risks to further derail the company's fortunes, we believe that The RealReal should be avoided by investors."

I-Mab Biopharma

The Chinese biotech company, which went public on Nasdaq in January 2020, suffered when investors punished it after Abbvie pulled out of a partnership to study lemzoparlimab, a product that targets cancerous tumor cells. I-Mab then forged a relationship with Roche, but investors grew skittish about the years needed for pharma companies to develop new drugs. Still, a Morningstar senior equity analyst wrote last month I-Mab was "quite innovative and has the potential to create first-in-class and best-in-class drugs."