Cloudflare is one of my top holdings at over 20% total portfolio value.
Yesterday, Friday, stock price jumped nearly 10%. I’ve been searching for news to justify this, but can’t figure out the reason.
They have announced a gazillion things in the past couple of weeks with not that much reaction, and then this happened seemingly out of the blue. Anyone know why?
Not complaining, of course, just trying to make sense of it.
Good question. Using Google search, clicking on the “Tools” tab and limiting my search to one day, and clicking on the “News” tab, the most relevant news I could are promotions by Motley Fool. MF mentioned Cathie Woods’ ARKK fund is buying(https://www.fool.com/investing/2021/04/24/3-cathie-wood-stoc…) and also that Biden’s proposed infrastructure plan could benefit NET. https://www.nasdaq.com/articles/president-biden-wants-to-spe…
Actually, the article is correct in that “Not surprisingly, business is booming and is probably part of the reason why Cathie Wood has this stock in her ARK Next Generation Internet ETF.”
But that has nothing to do with ARKK or with any recent buying.
ARKK owns not a share of NET. ARKW is 1% NET, but it has been so for a while. I receive the trades daily and have seen nothing about NET. They bought no NET yesterday per the email.
More pertinently, Cathie Wood and her team do not like the valuations of SaaS companies. I have asked them about DDOG and they simply said it is a great company but very expensive. ARKW is pretty light on SaaS.
I watched a MF interview with Ms Wood about a month or so, and she said then it was grossly over-valued. I had bought NET sometime before that interview and watched it go down…tsk tsk tsk on me. Thankfully, I just dipped my toe in the water as to number of shares, thank goodness, but I’m either going to have to wait patiently for it to go up to what I paid for it…it’s a good stock according to her and others…or I’m going to say the heck with it and move the money elsewhere.
Stay humble and keep learning.
Most growth stocks popped on Friday along with NET. Hedge funds have been shorting the entire group and focusing their efforts on small-cap stocks that are popular with retail investors. Those are easier to crush down and hedge funds need volatility to trade.
The group has been moving in a range for the past two months, I don’t know if the drawdown is over yet. But eventually, the reopening trade will run out of steam. I am waiting for earnings before I make any changes to my portfolio right now. There is too much volatility with no news to make an informed decision on most stocks I own.
10% is a lot of noise, but from what I can tell it is still noise in this case. Cloudflare is a great business and business seems to be going great. Expensive? Sure, but cheaper than it was. Unless something changes with the business, I don’t see selling my shares any time soon, regardless of what the fickle market does in the short term.
Dorset, Long NET and several other SaaS companies.
This thread has turned into a discussion of ARK ETF’s investing policies and of market timing rather than a discussion of Cloudflare, the company. Let’s close this thread here.
Thanks for your cooperation,