It’s that time of the year again. Parents are buying presents for their children, mobile device fanatics are arguing over iOS and Android, and investors are clearing out their portfolios before the end of the year to make their tax rebate checks just a little bit fatter.
2014 hasn’t been a good year for tax harvesting specialists. With the S&P 500 up 12% and the NASDAQ up just a bit more than 14% so far this year, it’s been a great year for everyone going long on stocks, and a bad year for writing off losses.
That is, except for some.
Indeed, in a year in which the market map for technology stocks is a flood of bright green, there is a small technology twilight portfolio of stocks that are distinctively gray, black, and at times bright red stars peeking through. Those companies offer a window into some of the major changes happening to the industry this year, but there are also some notable outliers this year that might surprise those following the news.
No stock was battered more in the large cap technology sector than Sprint, which is off more than half of its price from 2013. The company’s stock was growing rapidly at the beginning of the year, as the excitement from the company’s buyout by Softbank continued to percolate. But the company’s financial numbers have not kept pace with the expectations of analysts, who remain neutral on the company’s turnaround strategy.
Sprint was hardly the only mobile carrier facing a dismal 2014. Both AT&T and Verizon had essentially flat share prices for the year, due in part to increasing competition between all three networks and from T-Mobile, which launched its Uncarrier branding in 2013 and is now on its eighth iteration of the program. That strategy has given T-Mobile the leading revenue growth among the top four carriers, although it only managed to eke out a 2% gain for the year on its share price.
Social was another space where several companies got battered, notably Twitter, which is down more than 28% this year. The company rallied briefly this week after an analyst speculated that CEO Dick Costolo might be stepping down next year, following mediocre rates of user growth and lackluster revenue growth.
The stock is performing particularly badly compared to its competitor Facebook, which is up 63% this year. Unfortunately, the company looks set to continue to bleed as it tries to reshuffle its management staff, including most recently its head of product, Daniel Graf.
Groupon continued its poor performance this year, shaving off a fifth of its price as it tries to reinvent itself. The company began offering everything from new business pages to compete with Yelp to its new Groupon Basics service for home goods this year, and it even developed an analyst day to burnish its image on Wall Street. Nonetheless, the company’s market cap remains almost identical to the buyout offer it was reportedly offered by Google in 2010.
Selling to the enterprise was the hot way to sell an IPO this year, that is, except when it wasn’t. Castlight Health, which debuted in March this year, is down almost 70% from its initial share price, and has hovered at this nadir since summer. Behemoths IBM and VMWare also performed poorly, with the former losing 7% and the latter 2% this year as both companies faced a passel of competitors, particularly in cloud services.
With analysts excited for the future growth of the company, Splunk, a popular data analytics software platform for enterprises, zoomed up in March this year, only to see its stock collapse in the enterprise freeze this summer that also knocked Box’s IPO off course. Now, the company is merely down 8%, giving everyone a breath of fresh air and a tax write-off.
One surprising company in 2014 was Google, which saw its stock price decline slightly for the year after a true roller coaster ride. Analysts remain excited for the company’s potential to create new products like its self-driving car, but they remain cautious over Google’s critical advertising revenues, particularly its cost per click.
The technology twilight portfolio may be small, but its members are also some of the most iconic companies in tech. Given the roaring economic growth currently underway in the United States if not the rest of the world, these companies all need to double-down in the new year, lest they be left behind by far more aggressive competitors and startups ready to take action.