10 Stocks Deep in the Red

Ten stocks fell hard on Tuesday, bucking an overall market optimism, as investors sold off on a combination of profit-taking and digesting company-specific developments that dampened appetite.

Meanwhile, all three main indices finished in the green, led by the tech-heavy Nasdaq, up 0.59 percent, followed by the Dow Jones, which rose 0.39 percent, and the S&P 500, which grew 0.25 percent.

In this article, we name the 10 stocks that fell the heaviest on Tuesday and detail the reasons behind their drop.

To come up with the list, we focused exclusively on companies with a $2 billion market capitalization and 5 million shares in trading volume.

Stock market charts. Photo by Kaboompics.com on Pexels

10. Block Inc. (NYSE:XYZ)

Block Inc. saw its share prices decline by 6.59 percent on Tuesday to close at $60.11 apiece as investor sentiment was dented by the launch of a probe into six “Buy Now, Pay Later” (BNPL) companies.

Afterpay—a subsidiary of Block Inc. (NYSE:XYZ) which engages in BNPL—was one of the six firms that received letters from the offices of the Attorneys General of California, Colorado, Connecticut, Illinois, Minnesota, North Carolina, and Wisconsin, seeking detailed information regarding their pricing and repayment structures, consumer contracts, disclosures, and user agreements, among others.

The other companies include Affirm, Klarna, PayPal, Sezzle, and Zip.

The seven states made the move after the Consumer Financial Protection Bureau dropped plans that would give consumers key legal protections and rights that apply to conventional credit cards, including the right to dispute charges, and demand a refund from lenders after a purchase return.

“As [President Donald] Trump rescinds critical protections for buy-now-pay-later consumers, it’s up to states now to ensure shoppers know what they are getting into, and to ensure these companies are held accountable,” said Connecticut Attorney General William Tong.

9. TeraWulf Inc. (NASDAQ:WULF)

TeraWulf extended its losses to a second day on Tuesday, shedding 7.06 percent to close at $14.22 apiece as investors sold off positions ahead of the mandatory conversion of its preferred shares into common stocks.

Next Tuesday, December 9, all convertible preferred shares of the company will automatically convert into 141.9483 common shares, a transaction that could result in a potential dilution. Any fractional interest would be paid in cash.

The conversion was in pursuant with the Certificate of Designations, which TeraWulf Inc. (NASDAQ:WULF) filed with the Secretary of State of the State of Delaware on March 16, 2022.

Under Section 10c of the Certificate of Designations, the company has the option to convert all its outstanding convertible preferred stocks into common shares, provided that for at least five trading days from November 4 to 24, 2025, whether or not consecutive, the closing price of its common shares exceeded 130 percent of the conversion price, or $10.

According to TeraWulf Inc. (NASDAQ:WULF) Chief Finance Officer Patrick Fleury, the mandatory conversion reinforces the company’s financial discipline and enables focus on growth moving forward.

“[This] announcement represents a key milestone on our journey to simplify TeraWulf’s capital structure going forward, supporting future growth while providing transparency to investors,” he said.