How does stock price affect narrative?


The relationship between stock price and narrative is intriguing; Brad Barrett and Brian Feroldi discuss this in the podcast episode "418 | Investing Lessons Learned in 2022 | Brian Feroldi." They explore how Wall Street's perception can drastically change based solely on stock price movements. A key example provided is Peloton, which was once celebrated as a revolutionary company during its high stock price phase in 2020. However, as its stock price plummeted by over 90%, the narrative shifted to viewing Peloton as a failing company likely to go bankrupt. This illustrates that rather than the stock price deriving from the narrative, the narrative often shifts in response to changes in stock price. They also highlight that while business fundamentals should theoretically dictate the narrative, in many cases, they are overshadowed by short-term price movements 1.

Narrative vs Price

Brian and Brad discuss how the narrative of a company can change drastically based on its stock price, and how this affects Wall Street's perception of the company's business fundamentals. They question whether growth for the sake of growth is sustainable and if companies can run losses in perpetuity.


418 | Investing Lessons Learned in 2022 | Brian Feroldi