Vroom, Shift Technologies stocks sink after J.P. Morgan turns bearish, on continued challenges for used car industry
Shares of Vroom Inc. dove 3.8% and Shift Technologies Inc. shed 2.4% in premarket trading Monday, after J.P. Morgan Rajat Gupta turned bearish on the online auto buying platforms, citing an expected continued challenging backdrop for the used car industry. Gupta downgraded both companies to underweight from neutral; Gupta had downgraded both to neutral from overweight in December 2021. "[Vroom] and [Shift] shares have already de-rated meaningfully [year to date], and taking a fresh look after both companies have laid out individual go-forward plans, there is clearly not easy/quick fix or turnaround due to which we struggle with the investment case in the near- to medium-term," Gupta wrote in a note to clients. Vroom's stock has plunged 80.4% year to date through Friday, even after bouncing 98.1% since the June 13 record-low close of $1.07; Shift shares have tumbled 63.9% this year, but had bounced 101.6% since the record-low close of 61 cents on June 16. The S&P 500 has shed 10.2% year to date, and has rallied 16.7% since June 16.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.