What Happened?
Shares of streaming TV platform Roku (NASDAQ: ROKU) fell 5.6% in the afternoon session after stocks pulled back (Nasdaq -1.5%, S&P 500 -1.2%) amid fresh concerns about trade tariffs. The pullback followed comments from President Trump clarifying the scope of his administration's 25% tariffs on Venezuela. He noted that it would apply to any country that does business with Venezuela. For example, 25% is on top of the already-in-place 20% tariff on China because China imports oil from Venezuela, which could translate to a 45% tariff on some Chinese goods. This announcement could significantly raise the operating costs for affected companies and institutions.
Adding to the market unease, the President announced plans for new tariffs on auto imports before the planned "reciprocal" tariffs on April 2, 2025.
The shares closed the day at $77.85, down 4.8% from previous close.
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What The Market Is Telling Us
Roku’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 10.4% on the news that Guggenheim analysts reiterated a Buy rating on the stock. The analysts cited the reasons for the positive rating, adding, "We maintain our high conviction that Roku will further improve engagement and economics in 2025, and that the business will exit the year at its strongest."
Roku is up 4.4% since the beginning of the year, but at $77.79 per share, it is still trading 21.5% below its 52-week high of $99.07 from February 2025. Investors who bought $1,000 worth of Roku’s shares 5 years ago would now be looking at an investment worth $866.74.
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