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Why Newegg Commerce is down while the market is up

What happened

Actions of Newegg trade (NASDAQ: NEGG) had fallen more than 16% as of noon Monday, continuing the decline from highs reached by the online consumer tech retailer last week as options trading became available during the recent IPO, but were in insufficient number.

So what

Newegg is a leading online destination for computer components, consumer electronics, peripherals and products for the smart home and games. The company has just been floated on the stock exchange through a reverse merger with a special purpose acquisition company, or SPAC. He seemed to be collecting the status of the memes stock almost immediately, and it shot up over 1000% very quickly.

Image source: Getty Images.

Yet there was no fundamental basis for the rise of his actions, and they are to be expected to return to earth fairly quickly. Even so, the stock is still up 167% from where it started last week, but investors shouldn’t be surprised to see it fall further.

Now what

Newegg has a solid history and a solid reputation in the retail business, so this is not a fly-by-night penny stock. The long-term growth story is probably just as strong, but not at all costs, and investors should wait until Newegg stock returns to more reasonable and rational levels before considering buying. the online retailer.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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Margarita W. Wilson

The author Margarita W. Wilson