The stock markets in the United States have been experiencing one of the most tumultuous periods in history in recent weeks, and on Thursday morning, stocks continued to tumble. This morning, all three main stock indices declined, dropping 7% upon opening and now down by over 9% at the time of writing. Across the board, all the major indices declined significantly and thereby resulted in steep declines for many large-cap stocks, as well as penny stocks.
Limit down rules are triggered when index futures swing 5% either way, which occurred on Monday. This indicates that the market is now extremely volatile.
The coronavirus crisis has destabilized stock markets across the world, and the United States markets were bound to be affected. The lockdown in some countries means that trade and commerce have been affected badly.
Many economies are sinking every hour, and in such a situation, volatility has gone up at an alarming rate. Investors who are looking to invest in penny stocks need to keep a close eye on the markets. Here is a quick look at five penny stocks that recorded significant declines.
Penny Stock Losers #1: GameStop Corp. (NYSE:GME)
One penny stock that has experienced steep declines in recent days is that of video game retailer GameStop. This morning, it emerged that activist investment firms Permit Capital Enterprise and Hestia Capital Partners have sent a letter to the company regarding the standstill agreement expiration.
The firms in question want one representative each on the company’s board. Both firms hold 7.5% each in the company, and in the letter, the firms stated that professional managers have overseen an 85% loss in value in their investments over the past half a decade. In light of that situation, they have demanded seats on the board.
GME stock went down by as much as 10.50% in early trade on Thursday.
Penny Stock Losers #2: Zagg Inc (NASDAQ:ZAGG)
ZAGG stock is one of the biggest penny stock losers after it emerged that the company’s board had suspended its strategic review. According to reports, in its review of strategic alternatives, the board failed to come across a concrete offer that was not considerably lower than the current market value.
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The company apparently consulted with as many as 60 strategic and financial entities. It came to light that the board decided that stockholder interests are going to be better served by going about it on a standalone basis.
After the news broke, ZAGG stock declined by as much as 45%, and it remains to be seen how it will perform today.
Penny Stock Losers #3: Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP)
CRBP stock is another penny stock that has been on a downward spiral this morning after the company announced its financial results for the fiscal fourth quarter. The revenue for the period soared by 36.8% and hit $2.6 million. Net losses declined by 53.8% and came in at $26.6 million.
The losses per share stood at $0.41, which reflected a significant decline of 36.7%. Corbus also announced that the Phase 3 Resolve 1 study of systemic sclerosis is on track for the summer of this year. The Phase 3 DETERMINE study for dermatomyositis is also currently being done. CRBP stock declined by 10% to $3.70.
Penny Stock Losers #4: Contango Oil & Gas Company (NYSEAMERICAN:MCF)
Another penny stock loser this morning is MCF stock, which has declined by as much as 15% in the early trading session on the back of a key announcement from the company. The company announced that it is currently in the process of conducting an extensive review of all its production areas to figure out whether it is worthwhile continuing to produce unhedged barrels.
The price environment has changed considerably in recent times in the oil space. The company is now trying to work out whether or not it should proceed with the production boosting program that is scheduled in the first half of the year.
Penny Stock Losers #5: Seelos Therapeutics Inc (NASDAQ:SEEL)
Finally, on today’s list of top penny stock losers, is SEEL stock, which has declined this morning on the back of an announcement from the company.
Seelos announced that it is going to make a public offering of its stock at $0.60 a share and is aiming to rake in around $3.9 million in proceeds. Underwriters are going to be over-allotted 1.125 million shares. The money is going to be used for corporate purposes and to take forward the development of some products.
The market did not react well to the news and SEEL stock nosedived by 25% and made a new 52-week low of $0.60.
The Takeaway
The market is now declining at an alarming rate, and it is difficult to see a bottom. Markets are expected to remain volatile due to growing uncertainty related to the coronavirus. Investors would do well to be a bit patient and wait for a turnaround before jumping in.
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