Hot Stocks: Meme stocks fall; MSFT buys ATVI; SI drops on earnings; HMHC looking to sell; UL looking to buy
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Stock traders returned after the three-day holiday weekend with selling on their minds. The major averages posted notable losses, led by a 2.6% drop in the Nasdaq.
Amid the selling spree, meme stocks were particularly hard hit. As investors jettisoned speculative names, one-time high-fliers like AMC (NYSE:AMC), GameStop (NYSE:GME), Bed Bath & Beyond (NASDAQ:BBBY) and Inovio Pharmaceuticals (NASDAQ:INO) all posted notable losses.

Silvergate Capital (NYSE:SI) represented another major decliner on the session. The stock lost a quarter of its value on a disappointing earnings report.
Unilever (NYSE:UL) showed weakness as well, with investors reacting badly to the company's attempts to buy GlaxoSmithKline's (NYSE:GSK) consumer business. With the decline, the stock set a fresh 52-week low.
Looking at some of the day's biggest gainers, Activision (NASDAQ:ATVI) was a standout, skyrocketing on a $69B deal to be acquired by Microsoft (NASDAQ:MSFT).
M&A headlines also contributed to a rally in Houghton Mifflin Harcourt (NASDAQ:HMHC). The stock rose on reports that the firm was looking to sell itself.

Sector In Focus

The mood surrounding meme stocks has changed dramatically in the past year. Tuesday saw high-profile names once favored by retail traders sell-off, despite an online attempt to trigger a renewed short squeeze.
AMC (AMC) fell 8%, while GameStop (GME) retreated nearly 7%. Looking at some other meme names, Bed Bath & Beyond (BBBY) dropped 9% and Inovio Pharmaceuticals (INO) fell 10%.
In January of 2021, the meme craze first burst into public consciousness, when a short squeeze targeted at GME prompted shares to skyrocket.

Standout Gainer

Activision (ATVI) jumped 26% after the video game maker announced that it has agreed to a nearly $69B deal to be acquired by software giant Microsoft (MSFT).
Under the terms of the deal, MSFT will pay $95 per share for ATVI in cash. Through the transaction, the Xbox maker will acquire a catalog of games that include the Halo franchise and titles like Call of Duty and Warcraft.
In a nod to the current regulatory climate for Big Tech, the deal has a breakup fee of $3B.
ATVI jumped $16.92 to close at $82.31. With the advance, the stock marked its highest close since August. Still, shares remain well off a 52-week high of $104.53.
In addition, ATVI finished Tuesday 15% below the amount contemplated in the merger deal. Meanwhile, MSFT edged down more than 2% to close at $302.64.

Standout Loser


A disappointing quarterly report sparked a massive sell-off in shares of Silvergate Capital (SI). The stock dropped 25% on the news.
The company reported a quarterly profit of $0.66 per share, up from last year but below the amount seen in the previous quarter. The figure was also well below the $0.73 per share that analysts had predicted.
SI retreated $35.04 to finish Tuesday's trading at $103.34.
The stock had reached a 52-week high of $239.26 last November but has lost ground in recent weeks. The latest slide has taken SI to its lowest level since September.

Notable New High

A report that the education publisher is exploring a possible sale sparked a rally in shares of Houghton Mifflin Harcourt (HMHC). The stock climbed almost 10% to reach a fresh 52-week high.
According to Bloomberg, HMHC has hired a financial advisor and could draw interest from private equity suitors. Meanwhile, the company could still decide to remain independent, Bloomberg reported, citing people familiar with the situation.
HMHC closed Tuesday's trading at $17.73, a gain of $1.57 on the session. The stock also managed to set an intraday 52-week high of $18.48.
Shares had traded in a broad range since November. Tuesday's rally allowed the stock to jump above recent resistance.


Notable New Low

Unilever (UL) dropped 14% after it confirmed it has offered about $68B to acquire GlaxoSmithKline's (GSK) consumer business. With the retreat, the stock fell to a new 52-week low.
News broke over the weekend GSK had rejected three non-binding offers from UL for the unit, with the latest offer coming in at Â£50B, or the equivalent of $68B. Amid worry that UL would overpay for the asset, the company promised "financial discipline" as it reviewed a potential transaction.
UL declined $7.84 to close at $46.45. During the session, the stock also established a fresh 52-week low of $46.07.
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