NEGG – Newegg Is the New Meme. The Electronics Seller's Shares Soared 148% Wednesday
[NEGG - Newegg Is the New Meme. The Electronics Seller's Shares Soared 148% Wednesday. - Stock Hide Out](https://www.stockhideout.com/stock-report/negg-newegg-is-the-new-meme-the-electronics-sellers-shares-soared-148-wednesday/)
[July 7, 2021](https://www.stockhideout.com/2021/07/07/) 10:57 pm
In a new and dramatic example of the Reddit-driven [meme stock phenomenon](https://www.barrons.com/articles/rapt-stock-is-rising-not-a-meme-biotech-51623774609?mod=article_inline), shares of online electronics retailer [Newegg Commerce](https://www.newegg.com/) soared 148% on Wednesday, extending the company’s remarkable [six-day run](https://www.barrons.com/articles/meme-stock-crash-coming-michael-burry-51625094355?mod=article_inline) to 560%. The move has ballooned Newegg’s market capitalization to nearly $25 billion.
Trading volume on Wednesday reached 75.5 million shares, about 75 times the average turnover in the stock. The volatility triggered trading halts in the stock six times in Wednesday’s session, [Nasdaq data shows](https://www.nasdaqtrader.com/trader.aspx?id=tradehalts#).
Newegg (ticker: NEGG) is a 20-year old business likely familiar to many gamers and PC buyers. The roots of the current situation date to 2016, when a China-based technology company called Lianluo Smart Limited [acquired control of Newegg](https://www.prnewswire.com/news-releases/dehaier-changes-name-to-lianluo-smart-limited-announces-strategic-personnel-adjustment-and-announces-date-of-annual-shareholder-meeting-300350474.html), buying a 56% stake for about $2.6 billion.
In October 2020, the two companies announced [a merger agreement](https://www.prnewswire.com/news-releases/lianluo-smart-limited-and-newegg-inc-announce-entering-into-merger-agreement-301159161.html) in which Nasdaq-listed Lianoluo (which in [a previous incarnation](https://www.prnewswire.com/news-releases/dehaier-changes-name-to-lianluo-smart-limited-announces-strategic-personnel-adjustment-and-announces-date-of-annual-shareholder-meeting-300350474.html) was known as Dehaier Medical Systems) acquired full control of Newegg. Think of it like a SPAC deal: Newegg effectively went public by merging into a small Nasdaq-listed company with few other operations.
Newegg’s largest investor is a China-based billionaire named Zhitao He, [according to a June 13D filing](https://www.sec.gov/Archives/edgar/data/0001474627/000121390021030093/ea141921-sc13dhang_newegg.htm). That filing indicates that He owns 224,394,418 Newegg shares, or about 61% of the company’s shares outstanding. At Wednesday’s closing price of $67.57, the stake was worth $15.2 billion.
A recent [filing with the Securities and Exchange Commission](https://www.sec.gov/Archives/edgar/data/0001474627/000121390021024372/ea140153-f1a6_lianluosmart.htm#a_002) shows that Newegg had 2020 sales of $2.1 billion. That would suggest the company closed Wednesday with a valuation of more than 12 times last year’s sales. To put that in perspective, the U.S. electronics retailer[Best Buy](https://www.barrons.com/quote/BBY) (BBY), which has a $27 billion market cap, had sales in the January 2021 fiscal year of $47 billion, or 0.6 times sales.
Newegg did not immediately respond to requests for comment.
In late trading, the Newegg trade showed [signs of cracking](https://www.barrons.com/articles/meme-stock-analysts-throwing-in-the-towel-51625093768?mod=article_inline), with the stock off 9% at $61.79.
Write to Eric J. Savitz at [eric.savitz@barrons.com](mailto:eric.savitz@barrons.com)
https://www.reddit.com/r/StockMarket/comments/og6ni0/negg_newegg_is_the_new_meme_the_electronics/
