In this article, we discuss the 5 Reddit’s WallStreetBets stocks that are tumbling. If you want to read our detailed analysis of these stocks, go directly to the 10 Reddit’s WallStreetBets Stocks That are Tumbling.
5. Meta Materials Inc. (NASDAQ: MMAT)
Number of Hedge Fund Holders: N/A
Percentage Losses Over Last Five Days: 5.71%
Meta Materials Inc. (NASDAQ: MMAT) is ranked fifth on our list of 10 Reddit’s WallStreetBets stocks that are tumbling. The firm is based in Canada and markets functional materials and nanocomposites. The share price of the firm has been given a short-term boost after weeks of losses on the back of the firm announcing that it had purchased a firm called Nanotech Security in a deal worth close to C$91 million. The closure of the transaction in this regard is expected in October, according to reports.
Meta Materials Inc. (NASDAQ: MMAT) is one of the most popular meme stocks on Reddit but despite the mentions on the internet forum, the stock was one of the biggest losers in July, losing close to a third in value over the month. These losses have extended into August.
On July 12, the share price of Meta Materials Inc. (NASDAQ: MMAT) plunged 6% in a single day to a two-month low. This followed an more than 30% decrease in value of the shares over the previous weeks after the firm upsized a stock offering to $250 million from $100 million.
4. GameStop Corp. (NYSE: GME)
Number of Hedge Fund Holders: 13
Percentage Losses Over Last Five Days: 5.80%
GameStop Corp. (NYSE: GME) is a Texas-based retailer of gaming and entertainment products. It is placed fourth on our list of 10 Reddit’s WallStreetBets stocks that are tumbling. The firm has a market cap of over $11 billion. The short interest on the stock is more than 13%. The stock has been hit in recent weeks amid media reports that streaming giant Netflix is planning a blockbuster entry into the world of video gaming. Investment advisory Citi has already termed the development a threat to existing video game firms.
On June 10, investment advisory Wedbush maintained an Underperform rating on GameStop Corp. (NYSE: GME) stock but raised the price target to $50 from $39, noting that the share price of the firm was completely disconnected from basic business fundamentals.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE: GME) with 3.2 million shares worth more than $620 million.
In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE: GME) was one of them. Here is what the fund said:
“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”
3. Roku, Inc. (NASDAQ: ROKU)
Number of Hedge Fund Holders: 63
Percentage Losses Over Last Five Days: 8.60%
Roku, Inc. (NASDAQ: ROKU) is a company that owns and runs a TV streaming platform. It is headquartered in California and is ranked third on our list of 10 Reddit’s WallStreetBets stocks that are tumbling. In earnings results for the second quarter, posted on August 4, the company reported earnings per share of $0.52, beating market predictions by $0.45. The revenue over the period was $645 million, up 81% year-on-year and beating estimates by $26 million. The share price of the firm still tumbled 9% after the results as user growth still lagged.
On August 5, investment advisory Morgan Stanley kept an Underweight rating on Roku, Inc. (NASDAQ: ROKU) stock and lowered the price target to $310 from $325, noting that the growth for the stock may peak soon.
At the end of the first quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in Roku, Inc. (NASDAQ: ROKU), up from 60 in the preceding quarter worth $3.2 billion.
In its Q4 2020 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Roku, Inc. (NASDAQ: ROKU) was one of them. Here is what the fund said:
“For two years running, Roku has now been either the largest or second largest driver of performance in portfolios. When we purchased Roku, obviously we never expected such a phenomenal outcome, so quickly—these things can only be chalked up to luck. However, we do think luck is the residue of design and Roku had all the hallmarks ex ante as the kind of position that could do something wildly spectacular. One of the first signs in seeing Roku’s potential was the sharp contrast between our modeled expectations for the top line of the business and where the consensus expectations were. This was the Shopify setup all over again. By this time, we had added an additional tool to our analytical framework, and this helped further enforce our conviction that not only was it we who were right about where things should go, but also that the very existence of this gap could be a potent source of fuel behind the stock as the world came around to our expectation. Specifically, we had become increasingly comfortable building lifetime value analyses of companies, and notably, when we bought Roku, we were quite confident that with only modest annual increases in average revenue per user (ARPU), and a 5-year average customer lifespan, we were buying the company for its existing customer base and nothing more. In other words, the growth at Roku was entirely free at the prevailing prices we bought into.”
2. AMC Entertainment Holdings, Inc. (NYSE: AMC)
Number of Hedge Fund Holders: 19
Percentage Losses Over Last Five Days: 11.67%
AMC Entertainment Holdings, Inc. (NYSE: AMC) is placed second on our list of 10 Reddit’s WallStreetBets stocks that are tumbling. The firm is based in Kansas and operates as a movie theatre chain. The stock is one of the most volatile ones on the market and has seen share price decrease in value despite mentions on Reddit and other social platforms over the past few weeks. The short interest on the stock is close to 16%. The company has a market cap of over $16 billion and posted $1.2 billion in revenue last year.
On June 4, investment advisory Wedbush reiterated a Neutral rating on AMC Entertainment Holdings, Inc. (NYSE: AMC) stock but raised the price target to $7.5 from $6.5, highlighting that the volatility in the share price of the firm was likely to continue.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $34 million in AMC Entertainment Holdings, Inc. (NYSE: AMC), up from 16 in the preceding quarter worth $24 million.
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE: AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
1. Fastly, Inc. (NYSE: FSLY)
Number of Hedge Fund Holders: 26
Percentage Losses Over Last Five Days: 14.21%
Fastly, Inc. (NYSE: FSLY) is ranked first on our list of 10 Reddit’s WallStreetBets stocks that are tumbling. The company owns and runs a cloud platform and is based in California. In earnings results for the second quarter, posted on August 4, the firm reported earnings per share of -$0.15, beating market predictions by $0.03. The revenue over the period was $85 million, up close to 14% year-on-year but missing estimates by close to $1 million. The company has a market cap of over $4.7 billion and posted $298 million in revenue last year.
Recently, investment advisory Citi maintained a Sell rating on Fastly, Inc. (NYSE: FSLY) stock and lowered the price target to $33 from $46, noting that the second quarter results had worsened an already challenging year for the company.
At the end of the first quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Fastly, Inc. (NYSE: FSLY), down from 32 in the preceding quarter worth $1.5 billion.
You can also take a peek at 10 Biotech Penny Stocks to Buy According to Reddit and 10 Cheapest Altcoins Popular on Reddit.
