NEGG

Newegg Commerce ($NEGG) Rockets 35x From $3 to $128... The Truth Behind Major Shareholder's $46M Bet

08/18/2025 16:25

Newegg Commerce Inc ($NEGG) has captured investors' attention with a dramatic price surge that saw shares rocket from a low of $3.57 in March to $128.09 on August 14, representing a staggering 35-fold increase from its trough. Behind this remarkable reversal lies a concentrated buying campaign by major shareholder Vladimir Galkin. Newegg Commerce operates as a leading online retailer specializing in computer hardware, consumer electronics, and gaming products in the United States. Founded in 1999, the company has built strong brand recognition among tech enthusiasts and serves as a specialized e-commerce platform competing with Amazon in high-performance computer components and gaming equipment. The most striking development has been major shareholder Vladimir Galkin's persistent buying spree. From July 8 to August 15, he executed 13 separate purchases totaling approximately $46 million worth of stock. Notably, on July 14, he acquired $9.26 million worth of shares in a single transaction, demonstrating strong conviction. Galkin conducts transactions jointly with his wife Angelica, initially purchasing through the Galkin Revocable Trust before transferring all shares to their joint account on July 10. This massive buying campaign wasn't coincidental timing. Newegg faced a serious crisis in April when its stock price fell below Nasdaq's minimum $1.00 bid requirement, threatening delisting. The company executed a 20-to-1 reverse stock split effective April 7, subsequently regaining Nasdaq compliance on April 23. However, reverse splits typically signal financial distress and are viewed negatively by markets. More concerning was management's announcement during the April 28, 2024 earnings release that the company was 'not prepared to deliver full year 2025 guidance at this time due to tariffs.' With the Trump administration intensifying tariff policies, electronics importers face direct impacts, and Newegg is no exception. Tariffs on Chinese-made electronics could significantly pressure the company's profitability. Despite these challenges, Galkin's buying continued unabated. From early July when shares traded around $18 through August as prices exceeded $100, he maintained consistent purchasing regardless of price appreciation. His $1.16 million purchase at approximately $104 per share on August 15 exemplifies his unwavering confidence. Key indicators investors should monitor include: whether Galkin continues additional purchases, the extent of tariff impacts in Q3 results, and most critically, the sustainability of current price levels. Positive factors include strong insider buying signals, Nasdaq compliance recovery, and solid demand in PC and gaming markets. However, extreme price volatility, tariff risks, and underlying vulnerabilities revealed by the reverse split warrant caution. The most probable scenario involves near-term correction followed by price stabilization at more reasonable levels. The $128 price appears excessive relative to company fundamentals. However, considering continued major shareholder support and the company's position in specialized e-commerce markets, stabilization at appropriate valuations remains possible. Nevertheless, significant downside risks exist if tariff policies intensify or consumer electronics demand collapses. In conclusion, while Newegg Commerce has achieved a dramatic turnaround, it carries substantial volatility and risk. The major shareholder's strong buying signals are certainly positive, but current price levels warrant cautious approach.