What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +1.4%, S&P 500 +1.0%) on hopes the reported ceasefire between Israel and Iran will hold. This de-escalation in a volatile region helped to ease concerns about potential disruptions to global oil supplies, leading to a notable dip in crude oil prices.
Additionally, dovish signals from Federal Reserve Chair Jerome Powell in his Congressional testimony, reaffirming a "wait-and-see" approach on interest rates, further calmed markets, improving investors' appetite for stocks and other risk assets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Aerospace company Redwire (NYSE: RDW) jumped 8.7%. Is now the time to buy Redwire? Access our full analysis report here, it’s free.
- Lending Software company Upstart (NASDAQ: UPST) jumped 8.4%. Is now the time to buy Upstart? Access our full analysis report here, it’s free.
- Beverages, Alcohol, and Tobacco company Zevia (NYSE: ZVIA) jumped 8.6%. Is now the time to buy Zevia? Access our full analysis report here, it’s free.
- Data Analytics company Domo (NASDAQ: DOMO) jumped 5.7%. Is now the time to buy Domo? Access our full analysis report here, it’s free.
- Modern Fast Food company Sweetgreen (NYSE: SG) jumped 5.3%. Is now the time to buy Sweetgreen? Access our full analysis report here, it’s free.
Zooming In On Redwire (RDW)
Redwire’s shares are extremely volatile and have had 92 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 17% on the news that the company priced a public offering for roughly 15.5 million shares of its common stock at a price of $16.75 per share. The gross proceeds from the offering were expected to be around $260 million. Notably, before the announcement, RDW had approx. 77million shares outstanding, which means the stock sale could significantly increase the supply. This could have a negative impact on its stock price as the increase in the supply of outstanding shares dilutes the ownership of existing shareholders.
Redwire is down 2.8% since the beginning of the year, and at $16.58 per share, it is trading 35.4% below its 52-week high of $25.66 from February 2025. Investors who bought $1,000 worth of Redwire’s shares at the IPO in January 2021 would now be looking at an investment worth $1,592.
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