Ten companies kicked off Monday’s trading in a bloodbath, mirroring the broader market pessimism, with valuations slashed by double digits mostly due to investor caution brought about by key economic uncertainties.
Wall Street’s main indices all fell in the red, with the tech-heavy Nasdaq recording the steepest downfall with 4 percent.
The S&P 500 declined by 2.7 percent, while the Dow Jones dropped by 2.08 percent.
In this article, we have identified the 10 worst-performing companies on Monday and detailed the reasons behind their drop.
To come up with the list, we considered only the stocks with $2 billion in market capitalization and $5 million in trading volume.
Source:Pexels
10. SoundHound AI Inc. (NASDAQ:SOUN)
SoundHound AI fell by 12.01 percent on Monday to close at $8.57 apiece as investors sold off positions following news that it was being investigated by several shareholder law firms for allegations that it materially misled business information to the investing public.
On March 4, SOUN told the Securities and Exchange Commission that it was unable to file its annual report for last year on time due to the complexity of accounting for its prior acquisitions of Synq3 and Amelia Holdings.
The notification furthered that SOUN “has identified material weaknesses in its internal control over financial reporting. These material weaknesses continue to exist as of December 31, 2024.”
SOUN said it expects to officially file its annual report by March 18, 2025.
9. AST SpaceMobile Inc. (NASDAQ:ASTS)
AST SpaceMobile dropped its share prices by 12.75 percent on Monday to close at $29.14 apiece as investor sentiment was dampened by an overall market pessimism.
On Monday, New Zealand-based telecommunications provider 2degrees announced that it partnered with ASTS for the development and extension of 4G LTE and 5G cellular coverage across New Zealand without the need for any specialized software or device support.
However, the news was not enough to propel ASTS’ shares higher, with prices after market hours still hovering in the red territory.
According to 2degrees, it will invest in the development of its own dedicated ground station in Aotearoa.
According to ASTS Chief Commercial Officer Chris Ivory, New Zealand’s diverse geography presents unique connectivity challenges, making it well-suited for space-based cellular broadband coverage.
“We look forward to collaborating with 2degrees to ensure people across the country have access to reliable broadband mobile services, even when they are outside traditional coverage areas,” he said.
8. Rocket Companies Inc. (NYSE:RKT)
Rocket Companies dived by 15.35 percent on Monday to end at $13.35 apiece, in line with the overall market decline, as investors turned cautious over its recent acquisition of real estate brokerage firm Redfin.
In a statement, RKT said it had entered into an agreement with Redfin for the acquisition of its shares for $12.50 for a total of $1.75 billion.
Founded in 2004, Redfin is one of the US’s leading real estate brands, operating a top-three home search platform with more than 1 million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents.
“Rocket and Redfin have a unified vision of a better way to buy and sell homes,” said Varun Krishna, CEO of Rocket Companies. “Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs, and increases value to American homebuyers.”
7. Rigetti Computing Inc. (NASDAQ:RGTI)
Rigetti fell by 15.4 percent on Monday to finish at $7.91 apiece as investors resorted to profit-taking following Friday’s surge while also exercising caution amid the overall market pessimism.
Last week, RGTI entered into a share purchase agreement with Quanta Computer, involving the latter’s purchase of $35 million RGTI shares at a price of $11.59 apiece.
Following the investment, the two parties would jointly invest $100 million over the next five years for the development of quantum computers.
The news propelled RGTI’s stock price on Friday by 9.87 percent versus Thursday’s close.
Meanwhile, Alliance Global Partners assigned a “buy” rating on RGTI and a higher price target of $16 from the $15 previously.
RGTI is expected to release a 36-qubit system based on four 9-qubit chips by mid-2025.
By the end of the year, RGTI expects to release a system with over 100 qubits with a targeted 2x reduction in error rates from the current level.
6. Tesla Inc. (NASDAQ:TSLA)
Tesla Inc. suffered its steepest drop in five years, slashing 15.43 percent on Monday to close at $222.15 apiece, as investors sold off positions to mitigate risks from recession fears and uncertainty over President Donald Trump’s tariff plans.
With higher tariffs now in place for Canada and Mexico, which are two of the key markets of automakers including TSLA, analysts turned even more cautious over the potential impact of the new levied taxes on production, sales, and retail prices.
Monday’s decline marked the third consecutive day of sell-off for the company, as well as its seventh straight week of losses from its highest price of $479.86 on December 17.
The firm’s current stock price now represents a 53.7-percent cut, or more than $800 billion in market capitalization.
Asked how Tesla founder Elon Musk was juggling his business and role as chief of the Department of Government Efficiency, Musk said in an interview with Fox Business that he was doing so “with great difficulty.”
5. MARA Holdings Inc. (NASDAQ:MARA)
MARA Holdings fell by 16.29 percent on Monday to close at $13.41 apiece alongside its crypto mining firms, as investors sold off positions amid economic uncertainties from President Donald Trump’s government policies.
The decline was also in line with the drop in Bitcoin prices, which has already fallen by 27 percent to the $79,000 territory from the $109,000 peak when Trump returned to the White House.
MARA, a Bitcoin mining company, is currently one of the largest Bitcoin hoarders, with more than 44,000 Bitcoins in its holdings.
Over the past few weeks, MARA has been riding the wave of volatility in the cryptocurrency industry, having earned Trump’s backing. However, traders hungry for more developments found the lack of more concrete plans disappointing.
4. MicroStrategy Incorporated (NASDAQ:MSTR)
Shares of MicroStrategy Incorporated, doing business as Strategy, nosedived by 16.68 percent on Monday, a third straight day, to finish at $239.27 each as investors sold off positions amid economic uncertainties that continue to dampen buying appetite.
MSTR declined alongside its fellow counterparts, tracking the drop in Bitcoin prices, which, as of this writing, was already at the $79,000 level.
On Monday, MSTR also announced that it would issue and sell shares of its 8-percent series A perpetual strike preferred stock, with a par value of $0.001 per share, for an aggregate amount of $21 billion.
According to the company, it intends to use the net proceeds for general corporate purposes, including the acquisition of Bitcoin and working capital.
MSTR is currently one of the largest Bitcoin owners, hoarding as much as 500,000 Bitcoins to date.
Over the past few weeks, MSTR has been riding the wave of volatility in the cryptocurrency industry, having earned Trump’s backing. However, traders hungry for more developments found the lack of more concrete plans disappointing.
3. Coinbase Global Inc. (NASDAQ:COIN)
Coinbase Global lost 17.58 percent of its value on Monday to end at $179.23 apiece as investor sentiment was influenced by an overall market pessimism.
Similar to other Bitcoin mining firms, COIN traded lower in line with the drop in Bitcoin prices, which are at the $79,000 level as of this writing.
Investors shunned news that the company’s Coinbase Derivatives LLC, a CFTC-regulated futures exchange, is launching the first 24/7 Bitcoin and Ethereum futures contracts.
“[This would give] US traders uninterrupted access to manage risk and seize opportunities—just like crypto,” it said.
COIN added that it was also developing a perpetual style futures contract which unlocks a key product that US traders “have been missing.”
“Built in response to strong demand from crypto-native traders, these innovations make US markets more accessible, competitive and aligned with global standards,” COIN said.
2. Robinhood Markets Inc. (NASDAQ:HOOD)
Robinhood fell by 19.79 percent on Monday to end at $35.63 apiece—a third consecutive day—as investors sold off positions to mitigate risks from economic uncertainties, coupled with news that it agreed to settle multiple investigations by the Financial Industry Regulatory Authority (FINRA).
On Friday, FINRA said that HOOD agreed to pay $29.75 million to settle penalties, of which $26 million will be paid as a civic penalty, while the remaining $3.75 million will be used to compensate its customers.
The penalty stemmed from HOOD’s alleged inadequate management of social media influencers promoting the platform and for not addressing alerts about delays in trade processing.
The issue peaked in January 2021 when HOOD was said to have limited transactions in meme stocks like GameStop and AMC Entertainment Holdings due to unusual trading volumes.
1. Reddit Inc. (NYSE:RDDT)
Reddit fell the hardest on Monday, losing 19.92 percent to end at $107.29 apiece, as investors sold off positions to minimize risks from broader economic uncertainties.
Monday’s decline marked the third consecutive day of losses for RDDT, which began last week following an insider selling of none other than its chief accounting officer, Michelle Reynolds, disposing of worth $1.88 million in shares at a price ranging from $151.35 to $164.31 apiece.
Following the sale, Reynolds’s ownership in the company now stands at 48,418 shares.
Amid the lack of a clear reason for the sell-off, investors will be closely looking out for cues on broader trends and changes within the company.
Last year, RDDT saw net losses expand by 433 percent to $484.27 million from the $90.82 million registered in 2023, despite revenues growing by 62 percent to $1.3 billion from $804 million.
However, it recorded a 283.7-percent jump in its net income for the fourth quarter last year at $71 million versus $18.5 million in the same period a year earlier. Revenues for the quarter also surged by 71 percent to $427.7 million versus $249.8 million.
While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RDDT but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
