Meesho Stock Falls: After a bumper listing of 46%, why did Meesho's stock suddenly crash, lost 21% in 3 days, what next!:

News Topical, Digital Desk : Volatility is nothing new for newly listed companies, but the movement in Meesho's shares has caught investors' attention. After a spectacular listing and a rapid rally within a few days, the e-commerce company's shares have now been under pressure for three consecutive sessions. Experts say the rally was driven by expectations, while the market is now weighing the reality. Shares of the recently listed e-commerce company Meesho have seen a sharp decline. On December 23rd, Meesho's stock fell by more than 8 percent, and this decline continued for the third consecutive trading session. The stock has fallen by nearly 21 percent in three trading sessions. On Tuesday, Meesho's stock fell to ₹185.34, causing the company's market cap to slip below ₹85,000 crore. This decline comes at a time when Meesho's shares saw a tremendous rise immediately after listing. The stock rose by nearly 65 percent in just four trading sessions. But after such a rapid rally, the stock has now collapsed, and investors are beginning to question how easy the path ahead is.

What's next? Bonanza Research Analyst Abhinav Tiwari told Moneycontrol that Meesho is certainly a strong long-term business, but at current prices, its near-term risk-reward doesn't appear attractive. According to him, the company's growth story is credible, but buying at such a high price doesn't fully cover factors like execution risk and current losses. He also said that Meesho's fundamentals are gradually improving, but the biggest risk is valuation. The overwhelming subscription to the IPO and the sharp surge after listing indicate that investor enthusiasm may have outpaced fundamentals. In such a situation, it may be wise to wait for the right price for a better risk-reward.

The stock had surpassed brokerage targets. Harshal Dasani, Business Head at INVasset PMS, says that Meesho's sharp rally had pushed the stock well above brokerage target prices. This clearly shows that initial optimism has already been factored into the price. According to him, the company is still in a transition phase towards consistent profitability. At this stage, investor confidence is based more on long-term opportunities, rather than near-term earnings clarity. He added that the presence of institutional investors after listing gives the company credibility, but maintaining these levels will require solid progress in unit economics, operating leverage, and handling competition. Experts believe that investors should now focus on delivery, not just headline growth. The real question is how quickly and strongly Meesho can convert its large scale into sustainable profits. This will determine whether the re-rating it received after the IPO will remain or normalize over time.