Why Ibotta (IBTA) Shares Are Sliding Today

What Happened?

Shares of cash-back rewards platform Ibotta (NYSE:IBTA) fell 2.4% in the afternoon session after reports revealed that Cathie Wood's ARK Invest continued to sell its stake in the company. According to trade filings, ARK Invest sold 3,733 shares of the consumer tech company across two of its funds for a total value of about $81,379. This was not an isolated event, as the investment firm had been trimming its position in Ibotta over several days. Such consistent selling by a high-profile investor often raises concerns among other market participants about a company's outlook, creating downward pressure on the stock price.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ibotta? Access our full analysis report here.

What Is The Market Telling Us

Ibotta’s shares are very volatile and have had 26 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 biggest move we wrote about over the last year was 4 months ago when the stock gained 9.7% on the news that the stock rebounded from a steep sell-off the previous week, as investors appeared to buy the dip in what could be a technical bounce or short squeeze. 

The rally follows a more than 31% plunge last week after the company's second-quarter earnings and revenue fell short of analyst expectations, leading to several downgrades. Despite the poor results, which showed a 2% year-over-year revenue decline, some investors may see a contrarian opportunity in the beaten-down shares. The company remains profitable, generated $18.9 million in free cash flow in the last quarter, and has an active $100 million share buyback program. Additionally, with short interest representing over 15% of the stock's float, the sharp upward move could be amplified by short-sellers buying shares to cover their positions, a phenomenon known as a short squeeze.

Ibotta is down 67.7% since the beginning of the year, and at $21.51 per share, it is trading 71.2% below its 52-week high of $74.78 from January 2025. Investors who bought $1,000 worth of Ibotta’s shares at the IPO in April 2024 would now be looking at an investment worth $208.28.

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