It’s not an exaggeration to say that investors of California-based electronics and computer parts e-retailer Newegg Commerce (NASDAQ:NEGG) have been taken on a roller-coaster ride. Just this summer, NEGG stock has been through a wild rally and a harrowing crash.
That’s not necessarily a bad thing — unless you bought the shares near the top of the rally. In that case, you might have to wait a while to get back to break-even.
As a result of NEGG stock’s eye-popping price action, some folks might label it as a meme stock. It’s up in the air whether that designation is fair and accurate.
With that in mind, let’s quickly review the stock’s incredible journey. Then, we can assess the catalysts which could propel the share price much higher, including a crucial crypto connection.
A Closer Look at NEGG Stock
Just by analyzing the price action of NEGG stock, we can easily determine how it acquired a reputation for being a meme stock.
The shares could be purchased for just $4 and change at the beginning of this year. However, the buyers soon stepped in and a moon shot commenced.
From January through June, NEGG stock ran hard to the upside, almost reaching $11 on June 29. And if you think that’s a big move, check out what happened next.
Amazingly, the buyers ran the stock to a 52-week high of $79.07 on July 7. Could this have been the handiwork of the Reddit short-squeeze mob?
It would be difficult to prove or disprove this hypothesis. Nonetheless, it’s entirely possible that social media traders were involved since there wasn’t any particular news catalyst to propel NEGG stock to that level.
After topping out in early July, the stock started to fall quickly. Easy come, easy go, as they say.
By mid-August, NEGG stock was trading at $18 and change. Before eyeing $80, the bulls should target the intermediate $30 and $42.50 levels and see if they can get there on heavy trading volume.
A Fast-Growing Business
Before we get to the cryptocurrency angle, it’s worthwhile to uncover some statistics to establish Newegg’s expanding size and scope.
Some folks might pigeonhole Newegg as an e-retailer where people and business can buy computer parts. That’s part of the company’s business model, but there’s more to the story than that.
Newegg also has a thriving logistics segment, which provides on-demand order fulfillment solutions.
The company’s fulfillment centers ship out over 55,000 packages daily in North America. Moreover, 91% of those packages are delivered within two days.
There’s also Newegg Staffing. This segment leverages a national network of qualified recruiters to source candidates for all levels of professional roles.
In all, Newegg has roughly 36 million registered customers, plus 610,000 registered business clients.
From healthcare providers to educational institutions and government agencies, Newegg caters to a broad array of customers across a variety of industries.
Improving the Shopping Experience
Furthermore, Newegg is establishing itself as an early mover in enabling cryptocurrency payments.
Back in 2014, before crypto prices went completely parabolic, Newegg established a partnership with BitPay to enable Bitcoin (CCC:BTC-USD) transactions on Newegg’s web platform.
In early 2021, Newegg started accepting Dogecoin (CCC:DOGE-USD) payments.
It’s a gutsy but forward-thinking move for Newegg to accept DOGE, I must admit.
And not long ago, Newegg announced that it would start accepting Litecoin (CCC:LTC-USD) as a payment method on the BitPay platform.
Andrew Choi, Senior Brand Manager at Newegg, emphasized the benefits of his company’s acceptance of LTC and other cryptocurrency payments: “Delivering a better online shopping experience isn’t only about price and selection – it’s also important to let people shop however they want, and that extends to offering flexible payment options … We’re thrilled to accept Litecoin, as we believe that convenient payment options improve the overall shopping experience for all our customers.”
The Bottom Line
It’s unfair to pigeonhole Newegg as just a purveyor of electronics parts.
In the same way, it’s unreasonable to label NEGG stock as nothing more than a meme stock.
Sure, the stock could get back to the $80 level if there’s a short squeeze.
Yet, Newegg’s expanding business profile — and its crypto connection — ought to be more than enough to get the share price back to its prior peak.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
