This year has been a great year for stocks overall, with the SPDR S&P 500 ETF Trust on track to finish the year up more than 24 percent. Unfortunately, some stocks that started off the year red-hot are limping into the close of the year as investors cash out of their gains and rebalance their holdings for 2022.
Meme stocks AMC Entertainment Holdings Inc. and GameStop Corp. are down 14.3 percent and 20.4 percent, respectively, so far in December after taking Wall Street by storm earlier in the year. But it’s not just sellers cashing out of meme stocks.
Other sellers are rotating from growth stocks to value stocks in anticipation of more Federal Reserve tightening and several interest rate hikes in 2022. Rising interest rates are typically bad news for unprofitable stocks because they increase the cost of interest on their debt. Rising rates also reduce the value of future cash flow, which pressures the valuations of growth stocks.
High-Flyers Making Crash Landings
Benzinga ran a screen of stocks that are up at least 50 percent year-to-date in 2021 but are down at least 20 percent in the past month to get an idea of which high-flying stocks investors are ringing the register on.- Asana Inc., one-month loss of 48.9 percent.
- AMC Entertainment, one-month loss of 42.2 percent.
- Riot Blockchain Inc., one-month loss of 38.5 percent.
- LendingClub Corp., one-month loss of 38.5 percent.
- Newegg Commerce Inc., one-month loss of 37.3 percent.
- Cloudflare Inc., one-month loss of 32.7 percent.
- Marathon Digital Holdings Inc., one-month loss of 30 percent.
- Silvergate Capital Corp., one-month loss of 29.3 percent.
- GameStop., one-month loss of 28.9 percent.
- Inmode Ltd., one-month loss of 27.1 percent.
