Former hedge fund manager Martin Shkreli takes short position in Newegg Commerce Inc., calling it "close to worthless" despite 1,338% rally this year.

Former hedge fund manager Martin Shkreli has shorted Newegg Commerce Inc. after the e-commerce retailer's 1,338% surge this year. Shkreli calls Newegg "close to worthless" with 12% gross margins and believes shares would at best be worth $50 even with cost cutting. Newegg has gained over 1,500% in three months due to renewed meme stock interest and plans to sell up to $65 million in common stock.

Former hedge fund manager Martin Shkreli has taken a short position on Newegg Commerce Inc. (NASDAQ: NEGG) following the e-commerce retailer's 1,338% surge this year. Shkreli, known as "Pharma Bro" for his controversial pharmaceutical pricing practices, announced on Thursday that he had shorted the stock, dismissing it as fundamentally overvalued [1].

Shkreli, in a post on X, stated, "I shorted NEGG. It's close to worthless with 12% gross margins (in a good year). Even if the company had no costs, it would be overvalued. Unfortunately, it does cost money to run the business, but even with significant cost cutting, shares would at best be worth $50" [1].

Newegg, based in Diamond Bar, California, has gained over 1,500% in three months. The surge appears to be linked to renewed meme stock interest, with 12.25% of Newegg's float currently sold short [1]. On July 15, Newegg announced plans to sell up to $65 million in common stock, further fueling investor interest with shares gaining 260% since the announcement [1].

Newegg closed Thursday at $128.09, up 39.39% with after-hours trading showing $128.86. The stock trades within a 52-week range of $3.32 to $133.00, with a market capitalization of $2.50 billion and average daily volume of 1.18 million shares [1].

Technical analysis shows overbought conditions, with Newegg shares hitting 52-week highs Thursday with robust volume of 1.36 million shares, well above the 100-day average. The stock shows strong momentum with a Benzinga Edge Stock Ranking momentum score of 99.49. However, the RSI at 80.7 indicates overbought territory, suggesting potential pullback risks [1].

Newegg's recent rally has been fueled by technical momentum and operational news. The company launched the Newegg Gamer Community, a dedicated platform for PC gamers, custom-build enthusiasts, and tech hobbyists. Management sees this as a strategic entry point into the fast-growing gaming hardware sector, aiming to strengthen customer engagement and brand loyalty [2].

Additionally, Newegg announced a $65 million at-the-market (ATM) equity offering managed by Needham & Company, which will earn a 3% commission on each share sold. While equity offerings can sometimes spark dilution concerns, market reaction has been largely positive. Many investors view the move as a proactive step to fund operations and growth rather than a sign of financial strain [2].

References:
[1] https://www.benzinga.com/markets/equities/25/08/47147065/pharma-bro-martin-shkreli-shorts-newegg-after-1338-rally-calls-it-close-to-worthless
[2] https://www.fxleaders.com/news/2025/08/14/neweggs-wild-summer-surge-gets-hotter-negg-stock-4-to-132-ride-and-below-100/