In this article, we discuss the 10 Reddit stocks that are getting crushed. If you want to read about some more Reddit stocks that are getting crushed, go directly to 5 Reddit Stocks That Are Getting Crushed.
Retail traders were the headliners of 2021 in the finance world. In 2022, these traders, although still very active at the stock market, have not been in the news much as inflation batters the market and value plays steal the spotlight from growth firms. However, one particular retail trader, Jaime Rogozinski, the founder of the popular WallStreetBets forum on Reddit, recently made waves when he announced the listing approval of the Insider Portfolio, a fund on the MERJ Exchange that tracks the performance of the stocks traded by prominent US Congress members, including House Speaker Nancy Pelosi.
In 2021, retail traders, many of whom frequent the WallStreetBets forum, had engaged in a battle for market dominance with hedge funds, resulting in losses worth billions to the latter. In 2022, this battle could very well come to the US Congress.
Some of the top Reddit stocks that are getting crushed include Robinhood Markets, Inc. (NASDAQ:HOOD), Upstart Holdings, Inc. (NASDAQ:UPST), and Snap Inc. (NYSE:SNAP), among others discussed in detail below.
Our Methodology
These were selected based on the hype around the companies on internet platform Reddit. Stocks that have registered a more than 15% decline in share price over the past few months were preferred for the list.
Reddit Stocks That Are Getting Crushed
10. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 57
Decline in Share Price Over Past Six Months: 17.86%
Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto universe. Even though the stock has suffered amid a broader lull around growth stocks, it has registered a small rally in the past few weeks on the back of reports that it is in talks to purchase 2TM, the firm that owns the largest crypto exchange in Brazil. The stock has also gained as Bitcoin, the most popular crypto coin, stays on course to climb above $45,000 as investors load up on the coin as a reserve asset in the inflation market.
On March 30, US Tiger analyst Bo Pei initiated coverage of Coinbase Global, Inc. (NASDAQ:COIN) stock with a Sell rating and a price target of $135, highlighting that the revenue of the firm was a “function of crypto market performance and transaction fees” and competition for the firm was “intensifying”.
Among the hedge funds being tracked by Insider Monkey, New York-based firm ARK Investment Management is a leading shareholder in Coinbase Global, Inc. (NASDAQ:COIN) with 5.4 million shares worth more than $1.3 billion.
Just like Robinhood Markets, Inc. (NASDAQ:HOOD), Upstart Holdings, Inc. (NASDAQ:UPST), and Snap Inc. (NYSE:SNAP), Coinbase Global, Inc. (NASDAQ:COIN) is one of the stocks that growth investors are keeping their eye on.
In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. (NASDAQ:COIN) was one of them. Here is what the fund said:
“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase Global, Inc. (NASDAQ:COIN) is a prime example.”
9. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 15
Decline in Share Price Over Past Six Months: 23.09%
BlackBerry Limited (NYSE:BB) provides security software and services. On March 31, the company posted earnings for the fourth quarter of 2021, reporting earnings per share of $0.01, beating estimates by $0.04. The revenue over the period was $185 million, missing estimates by over $1 million. In late January, the company had agreed to sell almost all of its non-core patent assets to Catapult IP Innovations for around $600 million.
On February 22, Canaccord analyst T. Michael Walkley lowered the price target on BlackBerry Limited (NYSE:BB) stock to $7 from $10 but kept a Buy rating, noting that there was a “broader multiple compression for software and cybersecurity stocks” despite a long-term bullish outlook.
Among the hedge funds being tracked by Insider Monkey, Canada-based investment firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited (NYSE:BB) with 46 million shares worth more than $436 million.
8. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 24
Decline in Share Price Over Past Six Months: 42.55%
SoFi Technologies, Inc. (NASDAQ:SOFI) provides digital financial services. Since a large part of the business of the firm relies on refinancing student loans, a federal student loan moratorium has had a negative overall effect on the stock. The firm has been introducing new crypto-focused initiatives to offset some of these negatives. It recently launched a new feature that allows users to invest a part of every direct deposit into a cryptocurrency. The feature comes with no extra fees.
On March 16, Morgan Stanley analyst Betsy Graseck downgraded SoFi Technologies, Inc. (NASDAQ:SOFI) stock to Equal Weight from Overweight and reduced the price target to $10 from $18, noting that the student loan moratorium had the potential to bleed into 2023, referring to the student loan business as a “key” catalyst for the firm.
At the end of the fourth quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $826 million in SoFi Technologies, Inc. (NASDAQ:SOFI), compared to 33 in the preceding quarter worth $852 million.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and SoFi Technologies, Inc. (NASDAQ:SOFI) was one of them. Here is what the fund said:
“During the quarter, the Fund initiated three new positions and exited five positions. Below we discuss some of our top net purchases and sales. We sold our position in SoFi Technologies, Inc. (NASDAQ:SOFI) after a strong run due to concerns about intensifying competition and rising customer acquisition costs for consumer-facing FinTech companies.”
7. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 33
Decline in Share Price Over Past Six Months: 43.57%
Palantir Technologies Inc. (NYSE:PLTR) is a software firm that works with the intelligence community in the United States. One of the biggest bulls of the firm, Cathie Wood of ARK Investment Management, has over the past few weeks dumped a large portion of her stake in the software firm, piling onto the pressure on the shares that had been on a downward trajectory amid a market shift towards value plays. The war in Ukraine, however, has prevented more downside as countries around the globe increase spending on intelligence and defense.
On March 9, Piper Sandler analyst Weston Twigg initiated coverage of Palantir Technologies Inc. (NYSE:PLTR) stock with an Overweight rating and a price target of $15, underlining that the firm was improving “operational effectiveness by combining software, artificial intelligence and data into powerful, central IT solutions”.
At the end of the fourth quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Palantir Technologies Inc. (NYSE: PLTR), compared to 35 in the preceding quarter worth $1.6 billion.
In its Q4 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Palantir Technologies Inc. (NYSE:PLTR) was one of them. Here is what the fund said:
“We have no new position this quarter and have made below changes to our portfolio. We also sold Palantir Technologies Inc. (NYSE:PLTR) as I identified it subject to high retail bubble risk (using above method) and are not part of our core “Mindful Compounder” holdings.”
6. Boxlight Corporation (NASDAQ:BOXL)
Number of Hedge Fund Holders: 4
Decline in Share Price Over Past Six Months: 45.95%
Boxlight Corporation (NASDAQ:BOXL) is an education technology company. After a prolonged lean period, the shares of the firm have jumped in the past few weeks after it completed the purchase of FrontRow Calypso, another edtech firm, through a $68 million credit agreement with WhiteHawk Finance. Boxlight paid a further $33 million in cash for the deal. The acquisition will add $30 million in sales and $15 million in gross profits to Boxlight financials, per Michael Pope, the CEO of the firm.
On March 10, Alliance Global Partners analyst Brian Kinstlinger kept a Buy rating on Boxlight Corporation (NASDAQ:BOXL) stock but lowered the price target to $4 from $6.5, noting that there was a limited confidence that the global supply chain will improve in 2022 and this created heightened operational risk for Boxlight.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Boxlight Corporation (NASDAQ:BOXL) with 1.5 million shares worth more than $2.1 million.
Along with Robinhood Markets, Inc. (NASDAQ:HOOD), Upstart Holdings, Inc. (NASDAQ:UPST), and Snap Inc. (NYSE:SNAP), Boxlight Corporation (NASDAQ:BOXL) is one of the stocks that retail investors have on their radar.
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Disclosure. None. 10 Reddit Stocks That Are Getting Crushed is originally published on Insider Monkey.
