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The stock market can be a wild ride, and Meesho investors are currently feeling every bit of that volatility. After a spectacular debut on the National Stock Exchange (NSE) back in December, the e-commerce platform's stock has hit a rough patch.
If you’ve been tracking the numbers, the shares have actually slipped below their listing price recently. For a company that was the talk of the town just a few weeks ago, this shift has raised a lot of eyebrows.
What’s Behind the Drop?
It mostly comes down to the latest quarterly results. Meesho reported a significant jump in its losses nearly 13 times more than the same period last year. While the company is definitely growing its revenue (up by 32% year-on-year), the sheer size of the loss around ₹491 crore has made investors a bit nervous about its path to profitability.
When the stock first listed at ₹162 (a solid 46% premium over its issue price of ₹111), it felt like there was no stopping it. It even touched a high of ₹254 in mid-December. But since then, it has tumbled by nearly 40%, now hovering around the ₹157 mark.
Is This the Right Time to Buy?
This is the million-dollar question. Despite the current gloom, not everyone is pessimistic. Global brokerage firm UBS, for instance, has maintained a 'Buy' rating on the stock. They see a potential upside and have set a target price of ₹220. Their logic seems to be rooted in the company's strong topline growth and its ability to scale in the competitive Indian e-commerce space.
However, the "wait and watch" approach is also gaining traction. Many analysts are concerned about how long it will take for the company to stabilize its expenses.
The Bottom Line
If you are someone who believes in the long-term potential of social commerce and Meesho’s unique model, this dip might look like a discount. On the other hand, if you prefer companies with clear profits, you might want to tread carefully.
As always, the stock market involves risk. It’s a good idea to chat with a financial advisor before putting your hard-earned money into such a volatile asset.
Read More: The Rollercoaster Ride of Meesho From Multibagger Gains to Trading Below Listing Price
