CART Plummets 7% Amid Regulatory Fears and Analyst Downgrades: What’s Driving the Selloff?

Summary
• Maplebear (CART) drops 7.03% intraday to $42.99, trading near 52-week low of $34.78
• Intraday range spans $42.975–$45.54, with 3.47M shares traded (1.67% turnover)
• RSI at 73.88 signals overbought conditions, while MACD (1.44) crosses above signal line (0.98)

Maplebear’s stock faces a sharp intraday selloff amid allegations of price discrimination, triggering a 7.03% drop to $42.99. The move follows a volatile session where the stock traded below its 52-week low and tested critical support levels. With options volatility spiking and technical indicators flashing mixed signals, traders are weighing whether this is a short-term correction or a deeper structural issue.

Price Discrimination Allegations Spark Regulatory Fears
The selloff follows reports alleging Maplebear engaged in price discrimination practices, with MarketWatch and WSJ highlighting regulatory scrutiny risks. The stock’s decline accelerated after news broke of a potential antitrust investigation, triggering profit-taking from longs and panic selling from short-term traders. This aligns with recent analyst downgrades, including Citigroup’s $50 price target cut from $65, and insider selling by executives like Fidji Simo and Morgan Fong. The move reflects growing investor concerns over regulatory headwinds in the e-commerce sector.

Internet Retail Sector Mixed as Amazon Rises
While Maplebear’s stock tumbles, the broader Internet Retail sector shows divergence. Amazon (AMZN) gains 1.33% as its cloud and advertising segments outperform. This contrast highlights Maplebear’s vulnerability to regulatory risks compared to Amazon’s diversified business model. However, the sector’s 2.18% 1-day gain suggests broader retail optimism, potentially limiting CART’s downside if the stock finds support near its 52-week low.

Options and ETF Plays for CART's Volatile Outlook
• 200-day MA: $42.92 (near current price), 50-day MA: $39.68 (below)
• RSI: 73.88 (overbought), MACD: 1.44 (bullish), Bollinger Bands: 45.35 (upper), 38.18 (lower)
• Key support: $38.18 (lower band), resistance: $45.35 (upper band)
• Sector ETF: XLK (up 1.2% today)

Two options stand out for short-term volatility plays:
• CART20251219C43 (Call, $43 strike, 12/19 expiry): IV 36.30% (moderate), leverage 31.15% (high), delta 0.61 (moderate), theta -0.1558 (high time decay), gamma 0.1463 (high sensitivity), turnover 9,114. This contract offers high leverage and moderate delta for a bullish breakout above $43.
• CART20251219C43.5 (Call, $43.5 strike, 12/19 expiry): IV 38.91% (moderate), leverage 36.34% (high), delta 0.5355 (moderate), theta -0.1484 (high time decay), gamma 0.1415 (high sensitivity), turnover 7,193. Strong gamma and liquidity make this ideal for a rally above $43.50.

Under a 5% downside scenario (ST = $41.50), CART20251219C43 would expire worthless, while CART20251219C43.5 would also expire out-of-the-money. Aggressive bulls should target a break above $45.35 (Bollinger upper band) for a potential 10%+ move, while bears may consider the $38.18 (lower band) as a critical support level. Aggressive bulls may consider CART20251219C43.5 into a bounce above $43.50.

Backtest Maplebear Stock Performance
CART's performance after a -7% intraday plunge from 2022 to now is currently not available. However, we can infer insights from similar backtest performances:1. RGTI Performance: RGTI experienced a -8% intraday plunge and had a Profit Loss Ratio of 0, with an average win return of 337.38% and an average loss return of 0%. This suggests that while RGTI had significant winning trades, they were offset by equal-sized losses, resulting in no overall profit.2. QS Performance: QS faced a -11% intraday plunge, but the cumulative average return turned positive after day 6, peaking at +6.6% by day 25 before fading to +3.0% by day 30. This indicates that QS recovered from the initial plunge and achieved modest gains, albeit not as high as RGTI's win returns.3. CEG Performance: CEG had a -3% intraday plunge and the frequency of meeting the "open-to-low ≤ –3%" condition was 153 trading days since 2022-01-01. This shows that CEG experienced a moderate level of volatility but also had a consistent performance relative to its own volatility.Given these precedents, if CART followed a similar trajectory to RGTI, QS, or CEG, we might expect that after a brief period of negative performance, CART could potentially recover and show positive returns. However, without specific data, it's important to note that past performance is not indicative of future results, and each asset's performance is unique due to market conditions, strategy, and other factors.

Act Now: CART at Pivotal Technical and Regulatory Crossroads
Maplebear’s 7.03% drop has created a critical juncture for investors. While technical indicators suggest overbought conditions (RSI 73.88) and a bullish MACD crossover, the stock’s proximity to its 52-week low ($34.78) raises concerns. The options market reflects this tension, with high IV and leveraged calls indicating speculative positioning. Traders should monitor the $43.00 support level and Amazon’s (AMZN, +1.33%) performance as sector barometers. A break below $43.00 could trigger a deeper correction, while a rebound above $45.54 (intraday high) may signal short-covering. Position sizing should reflect the high volatility and regulatory uncertainty. Watch for $43.00 breakdown or regulatory reaction.