Newegg Commerce (NEGG) - Get NEWEGG COMMERCE, INC. Report shares dropped Thursday alongside other meme stocks amid a broader market selloff that has cracked the upward momentum of publicly traded companies driven by collective enthusiasm and touting among retail traders.
Newegg shares were down nearly 20% after soaring 148% on Wednesday. The stock has jumped 560% over the last six days. Other meme stocks including poster children AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Report and GameStop (GME) - Get GameStop Corp. Class A Report also traded lower.
In Newegg’s case, TheStreet's Jim Cramer, in a tweet Wednesday, called the stock a “total BGL game,” referring to when stocks are bagged, gunned and liquidated. Newegg is an online electronics retailer.
On Thursday, he tweeted additional caution on Newegg, and on investors getting caught up and caught out in meme stock momentum trading gone awry.
"Do Not Sell!!!"
Meme stocks in general have been back in the spotlight amid calls on message boards including Reddit and Stocktwits to bid them higher, in some cases irrespective of any news or changes in underlying fundamentals like higher sales and earnings.
Marin Software (MRIN) - Get Marin Software, Inc. Report shares took off last week amid touts on Reddit message boards and other platforms to collectively push back against a potential short squeeze.
"Do not sell!!!" one poster said on Stocktwits. "Wayyyy to low price for selling."
"Shorts will have to hold 340% interest shares over holiday weekend," another said. "Then wake up to margin calls on Tuesday."
Marin Software stock was the second-highest trending ticker on StockTwits in terms of message volume last Friday. The shares were down 14.71% at $16.41 after falling more than 20% on Wednesday.
Cramer's Meme Stock Warning
Earlier this month, TheStreet's Jim Cramer warned that the ability of meme-powered investors to boost stock prices could fade in the coming weeks, citing a series of failed recommendations from discussions on the r/wallstreetbets chatroom in Reddit.
Cramer said in a recent Real Money column that some small-cap companies are looking to become meme stocks, but he said most companies with high short positions in their stock have "bad balance sheets, negative prospects and are inherently undervalued."
"You can't aspire to be a meme stock," he wrote. "That means aspiring to be shorted. And the shorts just aren't that stupid to take that bait."
Other meme contenders' shares were also lower on Thursday. Exela Technologies (XELA) - Get Exela Technologies, Inc. Report was down 7%, Powerbridge Technologies (PBTS) - Get Powerbridge Technologies Co. Ltd. Report was down nearly 5% and Verb Technology (VERB) - Get Verb Technology Company, Inc. Report was down about 1%.
At last check, Newegg was down 19.29% at $54.54.