How does a stake that once passed $460,000 wind up back around $40,000?
How does a stake that once passed $460,000 wind up back around $40,000?
Anyone who bought The Trade Desk (TTD +0.24%) on its first day of trading and hung on has seen the stock climb over 40-fold, then give most of it back. The ad tech company's shares finished that first day, Sept. 21, 2016, at $30.10 -- or around $3.01 adjusted for the 10-for-1 stock split in 2021.
At $3.01 a share, $10,000 bought around 3,322 shares. At the stock's $12.23 close on Oct. 16, these shares are worth around $40,600. Put simply, the stake is still worth about four times what it cost, though the stock trades 91% below its December 2024 peak of $139.51.
At that peak, the same stake was worth around $463,000.
But the company held up on the way down, at least until this year. Actually, I think the most telling point is that The Trade Desk makes more per share now than it did at the peak.
The Trade Desk's software lets brands and ad agencies bid on digital ad space automatically (what the industry calls a demand-side platform), and the climb was built on its results. Revenue in 2016 was around $203 million. By 2024, it was $2.4 billion, after rising around 36% a year on average. The company made a profit in every one of those years. And spending on its platform hit $12 billion in 2024, a record.
Even the 2022 sell-off didn't break that pattern. The stock lost around half its value that year, but revenue rose about 32% year over year to $1.6 billion.
Shares went on to set their record two years later.
By then, though, investors were paying a lot for that growth. At $139.51, the stock traded at almost 230 times earnings, based on the $0.61 of earnings per share The Trade Desk had generated over the last 12 months. A price-to-earnings ratio like that arguably only made sense if fast growth kept going for many more years.
What did the crash take?
Averytin News Financial update.