Wall Street’s main indices ended this week’s trading on a bloodbath following an overall market selloff as investors shifted their capital into assets offering higher returns.
This article will delve into the factors behind the downturn and explore why the 15 companies were particularly affected.
To come up with Friday’s top losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.
A stock market chart. Photo by Arturo A on Pexels
15. Oklo Inc. (OKLO)
Shares of Oklo Inc. (OKLO) on Friday dropped by 5.24 percent to end at $22.78 each following news that a shareholder law firm is investigating the company and certain officers over alleged fraud and unlawful business practices.
The investigation stemmed from a report from Kerrisdale Capital on November 20, questioning the prospects of Oklo. The report highlighted several concerns, including Oklo’s lack of regulator-approved reactor design, its inability to generate revenue for years, and the unproven commercial viability of its planned 15-50 MWe microreactors.
Kerrisdale argued that Oklo was facing significant technical and financial challenges in its goal of operating hundreds of small nuclear power plants and that it was exaggerating the potential economics of its reactors while underestimating the time and capital required to make them a reality.
14. Aurora Innovation Inc. (AUR)
Shares in Aurora Innovation (AUR), a self-drive automotive company, reported a 5.45-percent decrease in its share price on Friday to end at $6.94 apiece as investors stayed on the sidelines for further developments to perk up its stock price.
However, Aurora Innovation earned a bullish outlook from institutional investors, with Cantor Fitzgerald the most recent to join the bull’s camp. In a note to clients last week, Cantor Fitzgerald initiated coverage with an “overweight” rating and a price target of $10.
Cantor analyst Andres Sheppard highlighted Aurora’s clear commercialization roadmap, its high-margin, asset-light model, and favorable regulation trends, noting that the company has logged over two million supervised miles, with plans to deploy tens of driverless trucks by late 2025.
13. Unity Software Inc. (U)
Video games creator Unity Software was not spared from the broader market downturn, booking 5.5 percent losses on Friday to end at $22.84 apiece.
According to analysts, the downturn can be attributed to a selloff following gains in the previous trading days.
In the last 30 trading days, the company’s shares saw a 5-percent dip, from the $24.11 registered on November 29, 2024.
Year-to-date, its shares were down by 41 percent after a rough few years marked by poor decisions and big leadership changes.
Known for its game engine, the company lost its way by focusing too much on advertising and making questionable mergers, like with IronSource and Weta Digital. Things got worse with the introduction of a runtime fee that angered users and led to the CEO stepping down. New leadership under Jim Whitehurst and later Matthew Bromberg has shifted the company’s focus back to its core product: the game engine.
12. IREN Ltd. (IREN)
Shares of Iren Ltd. suffered a selloff on Friday, ending the week down by 5.56 percent to $10.71 apiece amid the lack of catalysts to spark buying appetite.
According to analysts, investors remained on the sidelines keeping an eye on its expanding operations in Bitcoin mining, high-performance computing, and the booming AI sector.
Friday’s share prices also marked a 13.6-percent decline in the past 30 trading days, but a jump of 57.5 percent year-to-date.
An analysis by InvestingPro recently said that IREN’s current valuation appears to be “slightly undervalued,” especially as the company continues to make strides in expanding its operations and diversifying into the artificial intelligence (AI) and high-performance computing sectors (HPC).
The company also demonstrated impressive growth, with revenue surging 119.92 percent in the last twelve months and maintaining a robust gross profit margin of 87.67 percent.
11. CleanSpark Inc. (CLSK)
CleanSpark saw a decline in its share price on the last trading day of the week, shedding 5.6 percent to finish at $9.78 apiece.
Friday’s trading day sparked a selloff, mirroring major indices, amid the lack of catalyst to perk up the market.
Over the past two months, several analysts have also posted a more pessimistic outlook on the company, downgrading their earnings per share (EPS) estimates from +$0.12 to -$0.30.
In the past 30 days, its share valuation decreased by 29 percent. Its stock has also been trading significantly below its 50-day moving average of $12.96 and its 200-day moving average of $13.07.
CleanSpark is a Bitcoin mining company which owns sustainable data centers powered by low-carbon energy sources. Its stock price mirrors Bitcoin performance which means that any volatility in Bitcoin trading will significantly affect CleanSpark’s share prices.
10. IONQ Inc. (IONQ)
Shares of IonQ Inc. on Friday dropped by 5.72 percent to end at $45.48 as investors resorted to profit-taking after the company hit an all-time high on Thursday.
Year-to-date, IonQ’s current valuation marked an impressive 274.01-percent growth. It also booked a 41.20-percent increase during the past 30 trading days.
Despite Friday’s profit-taking, analysts remained positive on the company, especially as it is seen to largely benefit from the booming Artificial Intelligence (AI) sector.
Last week, Morgan Stanley’s Joseph Moore more than doubled his price target for IonQ to $37 from $14.9 apiece, saying that while there is no clear catalyst for the current price appreciation, he sees continued indications that investment in quantum should continue growing at a rapid pace.
9. Rumble Inc. (RUM)
Rumble Inc., a video sharing platform and cloud services company, saw its share prices tumble by 6.39 percent on Friday to finish at $15.23 apiece as investors took profits following a 28.31-percent increase in its valuation on Thursday.
Year-to-date, the company’s stock price rose almost fourfold from the $4.34 closing on January 2.
Last week, the company announced that it entered into a definitive agreement for a strategic investment of $775 million from Tether, the largest company in the digital assets industry and the most widely used dollar stablecoin globally with more than 350 million users. Over the last few years, Tether has become one of the most recognized symbols of financial inclusion.
According to Rumble (RUM), a total of $250 million of the proceeds will be used to support growth initiatives and the remaining proceeds to fund a self-tender offer for up to 70 million Class A common shares.
8. Zeta Global Holdings Inc. (ZETA)
Marketing technology firm Zeta Global Holdings registered a 6.84-percent decline in its share prices on Friday to finish at $17.67 each following a class action lawsuit alleging that the company failed to disclose it was artificially inflating financial results.
In the lawsuit, plaintiffs alleged that the company failed to disclose that it used two-way contracts to artificially inflate financial results, that it engaged in round trip transactions to artificially inflate financial results, utilized predatory consent farms to collect user data and that the consent farms have driven almost the entirety of Zeta’s growth.
Law firms on Friday reminded shareholders with losses on their investment to reach out to them.
7. Hims & Hers Health Inc. (HIMS)
Telehealth company Hims & Hers Inc. (HIMS) registered a 6.77-percent decline in its share price on Friday, closing at $26.56 apiece following a selloff from its Chief Finance Officer, Okupe Oluyemi.
Oluyemi sold 4,213 shares of the company’s Class A common stock at an average price of $29.98 apiece, resulting in a total transaction value of $126,317.
Earlier this week, the company’s chief commercial officer Michael Chi also sold off positions on Hims & Hers, disposing of 17,393 shares for $27.97 each. The sale was part of a pre-established trading plan under Rule 10b5-1, adopted earlier this year.
In other recent news, Hims & Hers has been in the spotlight following the FDA’s resolution of the obesity drug shortage which has raised concerns about the impact on Hims & Hers Health, which had been offering compounded versions of such drugs.
6. AST Space Mobile Inc. (ASTS)
Shares in AST Space Mobile declined by 7.13 percent on Friday to finish at $22.92 apiece amid the lack of catalyst to spark buying positions.
Despite the decline, several analysts remained bullish on the company’s growth performance moving forward, even earning a “buy” rating.
Last month, UBS Group boosted its target price for AST Space to $31 from $30 apiece, while B. Riley upped its target price to $36 from $26 each.
Deutsche Bank was the most bullish among all analysts, increasing its price target to $63 from $22.
AST SpaceMobile is a company engaged in designing and manufacturing satellites. It said it aims to develop the foundation for an increasingly interconnected society.
5. Peloton Interactive Inc. (PTON)
Fitness technology company Peloton Interactive saw an 8.57-percent decline in its share price on Friday to finish at $9.39 apiece as investors resorted to profit-taking following Thursday’s gains.
In addition, analysts blamed the overall market downturn as having weighed down on its shares, while investors remained in a wait-and-see mode after the company nearly swung to profitability in its recent earnings report, having narrowed its net loss by 99.44 percent.
Earlier this year, Peloton earned an Altman Z-Score of -1.56, indicating that it is in Distress Zones and could face the probability of bankruptcy over the next two years.
A score of 3 or more shows that the company is performing fairly well.
4. Terawulf Inc. (WULF)
Terawulf Inc.’s (WULF) share price on Friday declined by 9.05 percent to finish at $5.53 apiece as investors remained in a wait-and-see mode following growing concerns over rising Bitcoin mining costs, which have significantly impacted the company’s financial performance.
In its recent filing, TeraWulf reported a loss of $0.06 per share in the third quarter of the year, worse than the expected loss of $0.03 per share.
On Monday, December 23, TeraWulf announced that it would lease over 70 megawatts of data center infrastructure to AI and cloud provider Core42 to expand its artificial intelligence revenue as it struggles with the rising Bitcoin mining costs.
“The data center leases reflect TeraWulf’s strategic extension into AI-driven computing, complementing its profitable Bitcoin mining operations,” TeraWulf said.
Investors gave a lukewarm reception to the recent move, as reflected in the recent decline in its share price.
3. Nuscale Power Corp. (SMR)
NuScale Power Corp., (SMR) a company engaged in designing and manufacturing small modular reactors, became one of the top losers on the last trading day of the week, slashing 10.71 percent to finish at $19.51 apiece.
Analysts do not expect the company to turn profitable before 2030 at the earliest. While valued at $3 billion in market capitalization, Nuscale boasts less than $10 million in annual revenue and is losing $80 million a year.
However, some believed that the company’s current valuation would spark a bargain hunt in the next few days.
Over the last 30 trading days, the company’s share price has already seen a 30.4-percent decline but marked a 521.4-percent jump year-to-date.
2. ZEEKR Intelligent Technology Holding Limited (ZK)
ZEEKR Intelligent (ZK), a Chinese automobile company owned by Geely Automobil Holdings, saw its share price drop by 9.6 percent on Friday to finish at $29.2 per share as investors resorted to profit-taking following a surge in the company’s share prices in the days prior.
In the past 30 days alone, Zeekr registered a 24-percent increase in its price, while eking out a 0.89-percent gain from its public offering price of $28.26 each in May this year.
In the long term, analysts remained bullish on the company’s stock as it stands to benefit from the booming electric vehicle industry, especially with China being the largest manufacturer of EVs with a 60 percent market share, followed by Europe with 25 percent, and the US with 10 percent.
1. Lemonade Inc. (LMND)
Insurance giant Lemonade Inc. registered a steep decline in its share prices on Friday, shedding 10.78 percent to finish at $39.40 as investors pocketed gains a 7-percent rally on Thursday.
Year-to-date, the company’s stock price has already jumped by 133 percent, while its 30-day trading indicated a 24-percent drop from $51.81 apiece registered on November 29, 2024.
According to analysts, the company’s performance can be attributed to concerns about the company’s profitability.
In the third quarter of the year, Lemonade Inc. reported a 71-percent increase in gross profit at $38 million, and a gross profit margin rise to 27 percent. Despite a larger adjusted EBITDA loss of $49 million, Lemonade reported a positive net cash flow of $48 million.
Looking ahead, the company said it would remain focused on acquiring profitable new business and leveraging technology to drive growth and efficiency. The company said it anticipates sustaining positive net cash flow by the end of the year and adjusted EBITDA profitability by 2026.
While we acknowledge the potential of LMND as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LMND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
