Meesho shares stayed under pressure for the eighth straight day on June 4. The stock fell around 5% to Rs. 166.60, marking the longest losing streak since the company listed in December last year.
The fall in Meesho shares has wiped out nearly 16.6% of its value in recent sessions. The stock has also dropped about 22% from its recent high of Rs. 227. The steady decline shows that investors have turned cautious.
The biggest reason behind this fall is the lock-in expiry on June 9; around 68% of the company’s pre-IPO shares will become free for trading after this date. Many early investors may sell their holdings, which is creating strong investor selling pressure.
Market experts say even minor selling can affect the stock price. Estimates suggest that if a part of these shares enters the market, outflows may reach about Rs. 5,400 crore. This amount is close to the company’s IPO size, which worries investors.
Valuation concerns have also added to the pressure. Meesho shares still trade at higher levels compared to other internet companies. Many early investors are sitting on good profits, so some may choose to book gains now.
The company has reported good revenue growth in the March quarter. Strong user demand and better delivery systems have supported growth. However, losses remain high, and cash flow has turned negative, which keeps sentiment weak.
The overall mood in the market has also changed. Investors now prefer companies with stable profits instead of only fast growth. This shift has increased pressure on new-age tech stocks like Meesho.
Despite this fall, Meesho shares still trade about 50% above the IPO price of Rs. 111. The stock had seen a strong rally after listing and even crossed Rs. 250 at one point. The current fall looks like a correction after that sharp rise.
Brokerages still see long-term potential in the company, and growth in users and sellers remains strong. However, the stock may stay under pressure in the short term as the lock-in expiry comes closer.
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