Alfi shares tumble from record, ‘meme stock’ Torchlight also sinks
3:12 pm Wednesday, June 23rd, 2021
(Reuters) – Shares of retail darlings Alfi Inc and Torchlight Energy were both down more than 20% on Wednesday, highlighting the wild ride facing investors in so-called meme stocks in a year that has thrown the spotlight on individual traders.
Shares of software firm Alfi were last down 24.4% at $12.32 after more than doubling in price to close at $16.29 in the previous session.
Analysts and social media users had pointed to an article on Benzinga.com, which quoted the company’s CEO and said Alfi would buy back $2 million of its shares, as a catalyst for Tuesday’s move.
Alfi confirmed this on Wednesday, announcing board approval for repurchases of up to $2 million. The stock pared some losses after the news before losing ground again.
Another retail darling, Torchlight Energy was down 26% on Wednesday, after a 29% slide in the previous day’s session after it increased its stock offering to $250 million.
Shares of a group of heavily shorted companies including video game retailer GameStop Corp and cinema operator AMC Entertainment Holdings Inc have seen wild swings this year in a phenomenon dubbed the “meme stock” rally that has been driven by retail traders on online discussion forums.
Although short interest in Alfi was at 3.85% of its free float at the end of May, according to the latest Refinitiv data, the company was among the top 10 trending stocks on trading-focused social media site Stocktwits, a platform commonly seen as a measure of interest from retail investors.
GameStop has also cashed in on the Reddit-driven rally in its stock, saying on Tuesday it had raised $1.13 billion in its latest share offering. Its shares were down 1%, after a 10% gain in the previous session.
Another meme stock, Clover Health Investments Corp was up 7.4% in high-volume trading while ContextLogic Inc was down 0.3% and AMC shares were basically flat.
(Reporting by Sagarika Jaisinghani in Bengaluru, Sinéad Carew in New York; Editing by Shounak Dasgupta and Lisa Shumaker)
