FVRR - Why Fiverr Stock Crashed This Week
2023-05-04 23:03:38 ET
Shares of Fiverr International (NYSE: FVRR) slipped as much as 28.3% this week, according to data from S&P Global Market Intelligence . The online freelance marketplace is feeling the heat as competitors reported weak growth to start 2023, and investors worry about threats from new artificial intelligence (AI) products. As of the close on May 4, the stock is down 27.7% since last Friday's close.
Fiverr itself didn't report earnings this week, but its close competitor Upwork did. The company's marketplace volume declined quarter over quarter to $1.0 billion and has been stagnating ever since economies around the world reopened from the COVID-19 pandemic. Since Fiverr operates in virtually the same industry (connecting freelance workers to jobs), investors likely didn't take this news positively and decided to sell off the stock along with Upwork. Investors should track Fiverr's marketplace volume when it reports its own earnings next week to see how its results stack up to Upwork.
Besides poor numbers from Upwork, investors are getting nervous about Fiverr losing market share for freelance work to automated artificial intelligence (AI) products like Open AI's ChatGPT. These large language models have shown the ability to produce fully functional websites and other computer science projects with just a few prompts from users, potentially displacing the need for human freelancers to perform these tasks. If this proves to be true, Fiverr could start losing customers from its marketplace as they use AI tools for freelance tasks instead.
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Why Fiverr Stock Crashed This Week