Wednesday’s premarket trading was trending lower. The S&P 500 was down about 17 points, the Dow Jones industrials were down about 154 points and the Nasdaq was down almost 70 points. Investors have been rotating into value stocks, ditching growth stocks, so far this week. That’s taken a toll on meme stocks as well.
Crude oil closed at $78.50 a barrel on Tuesday and traded down by about a dime Wednesday morning. Before the announced release of 50 million barrels from the U.S. strategic reserve, oil was trading below $76. Bitcoin traded down more than 2% earlier in the morning at $56,241, and yields on 10-year Treasuries were unchanged at around 1.67%.
Australia-based Naked Brand Group Inc. (NASDAQ: NAKD) has filed a notice of an extraordinary shareholders’ meeting for December 21 (December 20 in the United States) to vote on the company’s proposed acquisition of Cenntro Automotive Group. The acquisition, announced earlier this month, basically has Naked Brand Group playing the part of a SPAC. If the acquisition is approved, the surviving company will be known as Cenntro Electric Group.
An independent expert has concluded that the deal is “not fair but reasonable.” In Australia, an offer is “fair” if the price being paid is “at least equal to the value of the securities subject to the offer.” If the offer is fair, it is also “reasonable.”
If an offer is not fair but reasonable, the independent expert must “determine whether it is in the best interests of shareholders.” Generally, this means that there is no better offer. The expert report was submitted to Naked Brand’s independent directors Tuesday by FTI Consulting and was included in the meeting notice filed by Naked Brand Group.
The company’s stock dropped nearly 5% on Tuesday and traded down by roughly the same amount on Wednesday’s premarket at $0.62.
GameStop Corp. (NYSE: GME) closed down more than 13.5% on Tuesday, one of the worst performers among Bloomberg’s basket of 37 meme stocks. Other big losers on the day were Vinco Ventures and Progenity, both of which we discussed in our midday report Tuesday.
ContextLogic Inc. (NASDAQ: WISH) dropped more than 3% on Tuesday and traded down another 5% in Wednesday’s premarket at $3.77. The company has had no specific news, other than a large batch of insider stock sales last week.
While not a meme stock as such, Snow Lake Resources Ltd. (NASDAQ: LITM) may be acting like one. The lithium mining company is based in Winnipeg and came public last Friday at $7.50, raising gross proceeds of around $24 million. The company plans to be “the first fully renewable energy powered electric mine that can deliver zero carbon battery grade lithium.”
After spiking to a high of $18.42 on their first day of trading, Snow Lake Resources shares closed at $13.00. The stock tumbled by 38% to close at $8.08 on Monday, and then dropped another 8.4% to close at $7.40 on Tuesday. Shares traded down more than 3% in Wednesday’s premarket to $7.16. The average daily trading volume is over 9 million shares, but only 1.2 million were traded on Tuesday.
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