What Happened?
Shares of online fashion resale marketplace ThredUp (NASDAQ: TDUP) fell 6.1% in the afternoon session after investors appeared to show some nervousness ahead of its third-quarter earnings report. The online fashion resale marketplace was expected to report a significant year-over-year revenue increase of about 26.2%, reaching approximately $77.6 million. Analysts' forecasts called for an adjusted loss between $0.04 and $0.05 per share. The stock's decline suggested some uncertainty among investors as they waited for the official results and any forward-looking guidance the company might provide.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy ThredUp? Access our full analysis report here.
What Is The Market Telling Us
ThredUp’s shares are extremely volatile and have had 55 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 24 days ago when the stock dropped 4.9% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump.
The President's comments, stating on social media that China has 'become very hostile,' have injected significant volatility into the broader markets. This has particularly affected the leisure industry, which is highly sensitive to economic sentiment and discretionary spending. Leisure stocks, which include companies in travel, entertainment, and hospitality, rely on consumers feeling confident enough to spend on non-essential goods and services. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions. The prospect of escalating tariffs raises concerns about economic headwinds, which could lead to a slowdown in consumer spending. If consumers tighten their budgets in response to economic uncertainty, discretionary purchases are often the first to be cut, directly impacting the revenues of companies in this sector.
ThredUp is up 482% since the beginning of the year, but at $8.21 per share, it is still trading 32.1% below its 52-week high of $12.08 from August 2025. Investors who bought $1,000 worth of ThredUp’s shares at the IPO in March 2021 would now be looking at an investment worth $410.25.
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