Newegg Stock Surges 3,400% Despite Weak Fundamentals

On August 23, 2025, Newegg (NEGG) shares closed another 6.5% higher, continuing their remarkable rally that has seen the stock surge nearly 3,400% since early May 2025. This explosive growth has been driven by the company's popularity among meme stock enthusiasts across various online platforms, rather than any significant improvements in its underlying business.

In fact, Newegg's financial outlook remains bleak, with the computer hardware and consumer electronics retailer expected to face a sales decline and an EBITDA loss in 2025. Yet, the company's stock is trading at a staggering price-to-sales ratio of over 2,700x, far exceeding even the lofty multiples of high-growth tech darlings like Nvidia.

Amidst this disconnect between Newegg's valuation and its fundamentals, one notable development is the insider buying activity. Since June 2025, when the stock was trading around $10, company insider Vladimir Galkin has been steadily accumulating over 1.3 million shares of Newegg. This suggests that he believes the meme stock frenzy will continue, potentially allowing him to profit handsomely if he were to sell his stake in the days ahead.

However, such insider trading activity also raises concerns about the long-term sustainability of Newegg's share price. If Galkin were to offload his substantial position, it could put significant downward pressure on the stock, potentially leaving late-joining retail investors with massive losses. This highlights the inherent risks associated with investing in meme stocks, where hype and speculation often overshadow fundamental analysis.