The past month has definitely not been kind to the companies in the Riot 50. Even a few weeks ago, we were confident that they could close out the year ahead of the indexes, but those gains have been slashed. For these companies, who are influential in the IoT world, global trends have pummeled them, and that shows no immediate sign of lifting.
When viewed in the individual sectors and measured in raw dollar totals, the Networks segment is the only one that has collectively grown to date – up 11.78% since May. Every other segment is down, although Cloud & Platforms is only down by 0.2%. Automotive has been hit worst, down some 33.65%, while Wireless Modules is down 24.3%. Semiconductors has fallen 22.97%.
In total, the Riot 50 has lost about 8.65%. By comparison, the four stock indexes we track are down 3.09%. If you add each individual company’s stock percentage growth through the period, to avoid the raw-dollar imbalance of a very large company to a smaller one, then it’s a worse story. In that measure, the Riot 50’s stocks are down 12.86%, whereas the four indexes have only slid 2.54% – although that’s an unorthodox measure, but one that helps level the minnows and the giants.
Of the 50 stocks, only 12 have grown, and five of those grew by less than 1%. Starting with the best performers, we have Nuance (up 30.12%), Verizon (up 22.87%), Ericsson (up 19.11%), Tesla (up 16.59%, admittedly after historic poor performance to begin the period), and Microsoft (up 9.81%).
The second-tier of growth-posters constitutes Deutsche Telekom (up 4.38%), Amazon (up 3.11%), Oracle (up 0.84%), Cisco (up 0.31%), Orange (up 0.34%). All the Semiconductor stocks have shrunk, but Honeywell was up 0.65%, which saved us saying the same of the Industrial segment – and Telit’s 0.72% growth managed the same for Wireless Modules.
There were a few notable poor performers, which are worth separating from the worst-hit stocks in the Riot 50. We tracked IBM (down 15.53%), BlackBerry (down 22.89%), Skyworks (down 25.76%), CEVA (down 23.37%), Nvidia (down 22.81%), Microchip (down 25.39%), Silicon Labs (down 20.05%).
As for standout poor performance, we have General Electric (down 45.68%), u-blox (down 43.93%), STMicroelectronics (down 43.38%), Continental (down 38.13%), Sequans (down 36.05%), Ambarella (down 33.23%), Aptiv (formerly Delphi, down 32.4%), Landis+Gyr (down 31.81%), Sunsea Telecommunications (down 29.25%), and MediaTek (down 27.59%).
It makes for grim reading, especially for those in the Wireless Modules game, although it’s worth noting that while Sequans and u-blox are both down significantly, even Chinese rival Sunsea has suffered. In terms of scale though, their losses are nothing compared to GE’s – which has slipped from a market cap of $130bn to $69.4bn.
GE’s misfortune, some would argue mismanagement, is rather incredible – down 73% in the past three years, and 54% in the past 12-months. In the past two weeks, it has fallen from $11.30 to $7.99, and that’s after announcing that it was selling its Current division to American Industrial Partners. Evidently, the stock market thinks this is as dumb a decision as GE’s $22bn write-down, which was made as it tried to restructure its Power division.
That write-down was covered in an article at the beginning of the month. Part of GE’s restructuring saw the energy storage assets moved out of the Current division, and set up inside the parent company as GE Energy Storage. Now, Current, which focuses on energy management systems, smart city technologies, and lighting (both indoor and outdoor), will be sold off, but is going to retain the GE branding as part of a licensing agreement.
No price has been given, but Current was launched in 2015 as a startup subsidiary, and had $1bn in revenue. It began expanding its scope to target energy storage, EV charging, and solar – wrapped up in a data-centric services offering. However, GE has since scaled that scope back.
GE’s target was to reach $5bn by 2020, but it is unclear whether GE was not confident in reaching those targets and is essentially jumping ship, or perhaps that Current was exceeding targets and represented a solid return if it were sold now.
GE isn’t commenting, either way but this does seem short-sighted – without knowing the numbers involved. The smart grid portfolio should have remained a core focus within GE, but instead, a large part of it is being sold off in an attempt to right the ship. However, many believe GE has listed too far over, and will swiftly sink beneath the waves.
New CEO Larry Culp may well not be able to right this ship, and his comments to Wall Street saw the stock dip below $8 for the first time since March 2009. JPMorgan’s recent investor warning has done little to help, and warns that the stock call fall to $6 by the end of 2019, due to debt.