FAT.O Plunges 40.01% Amid No Major News as RSI Hits Oversold Territory—Volatility Lingers?

Fat Brands (FAT.O) plunged 40.0107% in pre-market trading on Nov. 24, 2025, with volume surging to 3.09 million shares—far exceeding typical activity despite no major public announcements. The sharp decline occurred amid an absence of clear technical reversal signals, though the RSI indicator entered oversold territory, hinting at potential short-term volatility without confirming a long-term trend shift.

The selloff has sparked speculation about possible triggers, including margin calls, short squeezes, or off-market events. Analysts noted the stock’s $8.04 million market cap leaves it vulnerable to rapid price swings from concentrated selling pressure. Related theme stocks showed mixed performance, with some gaining over 6% while others dipped slightly, reinforcing the view that the move was stock-specific rather than sector-wide.

Technical indicators such as the MACD and Head-and-Shoulders pattern failed to confirm a reversal, while order-flow data remains opaque. The lack of institutional block trades or net inflow/outflow metrics leaves uncertainty about whether the drop stemmed from algorithmic exits or retail panic selling. The stock’s history of high volatility and low liquidity further complicates attribution of the decline to a single catalyst.

Backtesting suggests a hypothetical long-term strategy focusing on RSI divergence and volume spikes could have flagged the oversold condition as a potential entry point. However, the absence of confirmed reversal patterns underscores the risks of relying solely on technical signals in low-liquidity scenarios. A hybrid approach incorporating off-market event monitoring might better capture catalysts in such volatile, thinly traded stocks.