The vacation ended for Expedia, but here’s where the stock could be traveling next…

Expedia tumbled, but history says the stock could be ready to rebound

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FRI, NOV 08, 2019
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Using Kensho technology, CNBC will surface research and analytic insights designed to create actionable, historical content around market moving events.

5cdf0fe71c1ca.png George Manessis
@GSManessis

VACATION CUT SHORT

Coming into Thursday, shares of Expedia were up about 20 percent, but that all changed after the company released its 3rd quarter report. The vacation website operator lost more than a quarter of its value after it missed earnings expectations by a wide margin, while slashing its full-year guidance.

But according to history, the stock could be ready to bounce back, at least a bit. A month after 1-day drops of similar magnitudes, the stock tends to rebound, with shares clawing back an average of 4%, trading positively 60% of the time.

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SHOP TILL YOU DROP

China’s Singles’ Day, the world’s largest online shopping event, takes place this Monday, November 11. Singles’ Day was started by e-commerce giant Alibaba a decade ago, and it’s become a sales phenomenon. In 2018 sales topped $30 billion, and this year it’s expected to surpass that figure. To put that in perspective, Singles’ day is expected to be bigger than Black Friday, and Cyber Monday combined.

However, a successful Singles’ Day has not always translated to gains for Alibaba’s stock, at least in the short-term. Over the five previous Singles’ Days that Alibaba has been a public company, the stock has sold off 80 percent of the time in the first trading day after the event, losing an average of 0.8 percent.

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