Newegg’s 34.3% Drop: A Meme Stock’s Gravity Lesson

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In August 2025, Newegg Commerce (NEGG) achieved what many thought impossible: it made losing 34.3% of one’s investment seem almost reasonable. A spokesperson for the laws of physics declined to comment. As both a shareholder and someone who once tried to balance a spoon on their nose for six months (a tale for another time), I can confirm: this stock’s ascent earlier this year was less about fundamentals and more about collective delusion. The kind of delusion that believes a bowl of petunias falling into a black hole might say something profound.

The meme stock surge that defied thermodynamics

If you bought Newegg shares on the last trading day of May and sold them at July’s end, you witnessed a 1,220% return. A $1,000 investment became $12,200 faster than you can say “financial advisor’s face when.” Yet here we are, post-August, with shareholders collectively wondering why their portfolios suddenly weigh 34.3% less than Schrödinger’s cat’s lunch. (The cat survived, by the way. It just shorted NEGG.)

Newegg’s half-year report in August revealed something shocking: the company actually sells electronics. Revenue grew 12.6% YoY, net losses shrunk from $25M to $4.2M, and gamers with deeper pockets kept buying AMD and Nvidia products. It’s almost as if the business works better when people purchase things! Yet the stock fell 13% the next day, because markets are rational entities governed by the same logic as a room full of monkeys with dartboards.

Short squeezes and other existential risks

This summer, Newegg became Wall Street’s favorite party trick. Short interest hit 331% of the float in July, a number so absurd it requires its own footnotes. (Naked short-selling, for those unfamiliar, is the financial equivalent of trying to sell cloud storage for actual clouds. Someone, somewhere, is definitely doing it.) The subsequent short squeeze lifted shares higher than a helium-filled penguin at a birthday party, before gravity remembered to check back in.

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Now 85% of the float remains on loan to short sellers, who are either remarkably optimistic or have misplaced their life insurance policies. The share price doubling over 52 weeks sounds impressive until you remember this is the same stock that spent three years slowly sinking like a brick in a bathtub filled with molasses.

Let’s not forget: even at its meme-driven peak, Newegg’s valuation looked like a rounding error next to its five-year highs. That 1,220% surge? Just a blip on the cosmic radar, like discovering your house has been made entirely of jellybeans.

I use Newegg regularly, comparing it to Amazon and Walmart with the enthusiasm of someone who enjoys spreadsheet cells aligning perfectly. But after all these years, it remains largely unprofitable – a feat requiring the persistence of a cockroach in a nuclear winter.

Trailing sales multiples at 0.47 suggest “bargain,” but remember: this is the same metric that would’ve called Bitcoin a steal at $10,000. Newegg represents a turnaround play for those who enjoy chessboxing matches against the Grim Reaper of Retail. The meme stock carnival has left town, but the smell of popcorn lingers. Whether it’s worth your time depends on your appetite for risk and how you feel about Sisyphean endeavors. 🎲

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2025-09-03 21:10