Newegg was once a top choice for tech buyers, known for affordable gadgets, computer parts, and fast delivery. But in recent times, the brand has been surrounded by uncertainty. Many are now asking, Is Newegg going out of business?
The company is facing serious financial pressure. Slowing sales, customer complaints, and a dramatic Newegg reverse stock split in April have sparked fears. With weak Newegg stock performance and growing concerns, some wonder: Is Newegg shutting down?
This article breaks down what happened to Newegg. We will explore the company’s bankruptcy risk, if it is still safe to buy from, and whether Newegg is still in business, or just hanging on by a thread.
Key Takeaways
- Newegg is still in business but battling major financial and operational setbacks.
- Its April reverse stock split was a survival move, not a sign of growth.
- Customer trust has dropped due to service failures and return issues.
- The company’s future hinges on its ability to cut costs and win back loyalty.
What Is Newegg?
Newegg is an American e-commerce company that specialises in consumer electronics, computer hardware, gaming gear, and tech accessories.
Since its founding in 2001, it has grown into a major online destination for tech enthusiasts, small business owners, and gamers seeking affordable components and reliable delivery.
Once known for its excellent service and vast product selection, Newegg carved out a loyal following in the DIY tech and gaming communities. But in recent years, the company has struggled with service complaints, shrinking sales, and increased competition from e-commerce giants like Amazon and Best Buy.
Newegg is currently owned by Hangzhou Lianluo Interactive, a Chinese tech company, and was taken public in 2021 through a SPAC merger.
It continues to operate under the brand Newegg Commerce Inc., with its headquarters based in the United States. Despite its recent challenges, the company is still in business and trying to pivot through restructuring, cost-cutting, and new product strategies.
Here is a full snapshot of Newegg’s company profile:
| Attribute | Details |
|---|---|
| Company Name | Newegg Commerce Inc. |
| Founded | 2001 |
| Headquarters | City of Industry, California, USA |
| Industry | E-commerce / Consumer Electronics |
| Products Sold | Computer parts, laptops, gaming gear, smart home devices, tech accessories |
| Target Audience | DIY PC builders, gamers, small businesses, and tech shoppers |
| Ownership | Owned by Hangzhou Lianluo Interactive (China) |
| Public Listing | Listed on Nasdaq via SPAC merger (2021) |
| Stock Ticker | NEGG (Nasdaq) |
| Official Website | www.newegg.com |
| Peak Popularity | 2005–2015 |
| Recent Issues | Declining revenue, poor customer service, and operational challenges |
| Current Status | Still operating, undergoing restructuring and strategic shifts |
The History of Newegg: From Tech Darling to Troubled Retailer
Newegg launched in 2001 and quickly became a favourite among tech enthusiasts for its low prices and wide selection of electronics and computer parts. By the mid-2000s, it was a major player in online tech retail, even rivaling Amazon in that niche.
However, as the years passed, customer complaints began to rise and the company struggled to keep up with bigger competitors. In 2021, it went public through a SPAC deal, but continued to face financial troubles and growing backlash over poor service.
Today, Newegg is still in business but fighting to stay relevant through restructuring, cost cuts, and a shift in strategy.
Key Events in Newegg’s History
| Year | Milestone/Event |
|---|---|
| 2001 | Newegg is founded in California by Fred Chang during the dot-com downturn |
| 2005–2010 | Grows rapidly as a leading online retailer for tech and computer hardware |
| 2010 | Launches international operations, beginning global expansion |
| 2016 | Ownership shifts towards Hangzhou Lianluo Interactive, a Chinese tech company |
| 2019 | Faces rising complaints about return policies and customer service |
| 2021 | Goes public via a SPAC merger; begins trading under the ticker NEGG on Nasdaq |
| 2022 | Public backlash from “ReturnGate” – mishandled customer complaints go viral |
| 2023 | Reports declining revenue, operational downsizing, and loss of investor confidence |
| 2024 | Continues financial losses but generates free cash flow; begins warehouse cuts |
| 2025 | Executes a 1-for-20 reverse stock split to remain listed on Nasdaq |
From its scrappy startup roots to public listing and recent turmoil, Newegg’s journey is a reminder that even beloved brands can falter if they do not adapt, innovate, and put the customer first.
Newegg’s Financial Troubles: The Numbers Behind the Struggle
Newegg may still be in business, but its financial health is far from solid.
Over the past few years, the company has seen a steady decline in revenue, widening losses, and increased concerns from investors. While it does have more cash than debt, that alone has not been enough to ease fears of a potential collapse.
The company’s decision to carry out a 1-for-20 reverse stock split in April signalled its effort to stay listed on the Nasdaq.
Although technically still cash-positive, Newegg’s high liabilities and poor earnings have raised red flags about long-term stability and bankruptcy risk.
Here is a breakdown of Newegg’s current financial state and performance trends:
| Metric | 2023 | 2024 | 2025 (YTD) |
|---|---|---|---|
| Revenue | $1.50 billion | $1.24 billion | Declining further (ongoing reports) |
| Net Loss | $59.0 million | $43.3 million | Ongoing |
| Adjusted EBITDA | –$21.3 million | –$9.5 million | Slight improvement |
| Free Cash Flow | Negative (operating cash used) | +$3.2 million | Fragile but positive |
| Total Cash on Hand | $102.5 million | $99.7 million | Still around $100 million |
| Total Debt | None outstanding under credit facility | $21.9 million | Manageable |
| Net Cash Position | $81 million (est.) | +$27.8 million | Still cash-positive |
| Bankruptcy Risk (Macroaxis) | 36% probability | ~36% probability | Still elevated |
| Altman Z‑Score | 2.76 (below safe zone) | Still in risky range | Elevated risk |
| Stock Activity | Volatile, no split yet | Reverse split (1-for-20) | Stabilisation efforts underway |
Despite efforts to improve its books, Newegg remains in a tight spot. If it cannot boost revenue or restore customer trust soon, its financial outlook could worsen.
What Newegg’s Reverse Stock Split Really Means
In April, Newegg executed a 1-for-20 reverse stock split, a bold move that instantly reduced its number of outstanding shares and raised the trading price of each individual share.
While it may sound like a sign of strength, reverse splits are often used as a last resort to stay compliant with stock exchange rules, particularly Nasdaq’s minimum price requirement.
Newegg’s reverse stock split was aimed at avoiding delisting, which would have severely damaged its visibility, investor confidence, and overall brand value.
The stock had been trading under $1 for an extended period, triggering Nasdaq’s compliance warnings. By consolidating every 20 shares into 1, the share price was artificially increased to regain compliance.
But this fix is cosmetic. A reverse stock split does not solve the core problems of a business. In fact, it can often shake investor confidence further, as it signals that the company is struggling to hold value.
For Newegg, the move kept it on the Nasdaq, but it did little to improve its deeper financial and customer service issues.
What Happened to Newegg?- Scandals That Damaged Newegg’s Reputation
Newegg’s downfall in public trust has notcome from just one mistake, it has been a series of missteps over the past few years. From denying valid returns to poor communication and questionable business practices, these scandals have reshaped how customers view the brand.
Each incident, has chipped away at Newegg’s once-solid reputation. Here is a look at the most damaging moments that made headlines and flooded tech forums with complaints:
Key Scandals That Affected Newegg’s Public Image
| Incident | Year | What Happened | Impact |
|---|---|---|---|
| ReturnGate | 2022 | YouTuber Steve Burke (Gamers Nexus) exposed Newegg for denying a valid RMA return | Sparked viral outrage, triggered widespread customer complaints |
| Refurb Fraud | 2022–23 | Customers received items sold as new but appeared used or damaged | Accusations of selling repackaged returns as new which eroded product trust |
| No Refund Loops | 2023 | Buyers reported being stuck in refund loops with no resolution | Frustrated repeat customers negative reviews flooded Trustpilot and Reddit |
| Fake Discounts | 2023 | “Deals” exposed as inflated original prices with fake markdowns | Perceived dishonesty, shoppers compared prices and called out tactics |
| Customer Support Delays | 2023–2024 | Support lines slow or unresponsive with no escalation path | Reinforced brand image as unreliable post-sale |
These scandals did not just upset a few customers, they went viral and permanently shifted Newegg’s public perception from “trusted tech store” to “buyer beware.”
How Newegg Is Trying to Survive: The Turnaround Playbook
Despite all the setbacks, financial losses, public backlash, and falling customer trust, Newegg is not giving up.
The company is actively trying to recover through a series of internal changes, cost-saving strategies, and new market focus. While none of these moves guarantee success, they show that Newegg is still fighting to stay relevant.
Here is how Newegg is working to turn things around:
| Strategy | Details | Perceived Impact |
|---|---|---|
| Cost-Cutting Measures | Closed underperforming warehouses and reduced logistics expenses | Frees up cash flow and helps offset declining sales |
| Staff Realignment | Streamlined departments and reduced headcount in non-essential areas | Lowers payroll costs and redirects focus to core operations |
| Reverse Stock Split | Merged 20 shares into 1 to boost share price and meet Nasdaq minimum listing requirement | Avoided delisting and maintained credibility with investors |
| Focus on AI and Tech Trends | Introduced high-performance PCs and AI-ready hardware to tap into emerging demand | Positions Newegg in fast-growing sectors with higher profit potential |
| B2B Market Expansion | Expanded offerings for small businesses and IT buyers, including bulk tech solutions and extended warranty services | Diversifies revenue streams beyond individual consumers |
| Improving Logistics | Partnered with third-party logistics firms to improve shipping speed and accuracy | Aims to compete with Amazon-level delivery expectations |
| Service Policy Adjustments | Rolled out new return/refund rules and improved transparency after facing backlash over customer treatment | Attempts to rebuild trust and reduce friction in the buying process |
While these steps show intent, the challenge is in execution. Newegg must consistently deliver better service, embrace innovation, and win back both customers and investor confidence to truly recover.
So, Is Newegg Going Out of Business?
As of now, Newegg is still in business, but it is far from stable. The company has not declared bankruptcy, shut down operations, or exited the market.
Its website is live, orders are being processed, and it remains listed on the Nasdaq after a reverse stock split in April.
That said, Newegg is clearly in survival mode. It is facing declining revenue, weakened customer trust, and increasing pressure from competitors.
The company is actively cutting costs, targeting new markets like AI tech, and trying to rebuild its reputation, but these efforts are in early stages and far from guaranteed success.
In short, Newegg is not going out of business yet, but it is walking a financial and reputational tightrope.
Whether it recovers or collapses will depend on how well it adapts, listens to its customers, and delivers value in a highly competitive e-commerce landscape.
Newegg vs the Competition: Is It Falling Behind or Finding a Niche?
Newegg’s current struggle is amplified when compared to how its biggest rivals are performing. Companies like Amazon, Best Buy, and Micro Center continue to dominate the tech retail space, not just in product range but also in customer service, logistics, and brand loyalty.
While Newegg still serves a loyal niche of PC builders and tech enthusiasts, it is no longer the leader in this space. Here is how it stacks up:
| Competitor | Strengths | How It Beats Newegg |
|---|---|---|
| Amazon | Massive inventory, same-day/next-day shipping, excellent customer service | Faster logistics, more seller options, easy returns, and greater buyer trust |
| Best Buy | Strong retail presence, Geek Squad tech support, flexible financing | Blends online + in-store service, strong warranties, and exclusive deals |
| Micro Center | Hyper-focused on PC builders and custom rigs, expert in-store advice | Trusted niche experience, better hands-on support, and reliable return policies |
| B&H Photo | Professional electronics, camera gear, and computing equipment | Higher-end customer service, cleaner UI, better stock for professionals |
| AliExpress | Cheap parts and accessories with global reach | Undercuts Newegg on price, though often with longer shipping times |
Newegg’s main edge used to be price and product variety, but that advantage is fading fast. With major players improving logistics and customer care, Newegg needs more than just tech products to stay competitive.
Its survival now depends on carving out a clear niche and delivering a customer experience that rivals trust-driven platforms.
What Business Owners Can Learn from Newegg’s Struggles
Newegg’s story is more than just a tale of falling profit; it is a valuable business case study.
For entrepreneurs, founders, and e-commerce operators, there are key lessons to take away from how this once-loved tech giant found itself fighting to survive.
Trust Is Your Greatest Asset
When customers stop trusting your brand, everything else begins to crumble, no matter how good your product is. Newegg once had loyal fans, but when service and return issues piled up, that loyalty vanished.
As a business owner, always prioritise transparency, honesty, and fair treatment. It is easier to keep trust than rebuild it after a fall.
Feedback Is a Wake-Up Call
Do not fear complaints as they are usually the earliest sign something’s off. Newegg ignored rising complaints until they went viral.
You do not want that. Instead, embrace customer feedback, use it to spot weak areas, and fix them fast. It shows you care and your customers will reward that.
Your Reputation Lives Online
In today’s digital world, every review, comment, or tweet is a reflection of your brand. Newegg underestimated the power of public perception and paid for it.
As an entrepreneur, build your reputation daily by delivering great service, solving problems quickly, and being visible where your customers hang out.
And if you want to put your brand in front of the right audience with credibility and trust, explore our advertising services to get seen by thousands of potential clients who value excellence.
Innovation Is not a One-Off Thing
Newegg was ahead of the curve for years, but it got comfortable. The market changed, and they did not.
Never assume what works today will work tomorrow. Whether it is your product, your platform, or your customer journey, keep evolving, testing, and improving. Innovation is how you stay in the game.
Watch Your Money Like a Hawk
One of the biggest business killers? Poor cash flow. Newegg had to make financial gymnastics just to stay listed on the stock market. You do not want that pressure.
As a founder, know your numbers, limit unnecessary spending, and build buffers for slow seasons.
Do not Put All Your Eggs in One Customer Basket
Newegg mainly served PC builders and tech enthusiasts. When that market shifted, they struggled to adapt.
Your business should serve more than one audience or depend on just one product. Broaden your reach, diversify your offerings, and stay flexible so you are never boxed in when trends change.
Conclusion
Newegg is not dead; but it is definitely wounded. What was once a trusted name in tech retail has become a warning sign for every business that stops listening to its customers, neglects its reputation, or fails to evolve.
The company’s financial losses, public scandals, and desperate stock moves did not happen overnight, they were the result of small cracks ignored for too long.
As an entrepreneur, you do not need to repeat those mistakes. If you are building an e-commerce brand, running a service business, or launching a new venture, the lessons are clear: value trust, monitor your cash, adapt fast, and always put your customer first.
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Frequently Asked Questions (FAQs)
Is Newegg going out of business?
No, Newegg is still operating. It continues to sell products, ship orders, and trade publicly. However, the company is facing financial and reputational challenges and is actively trying to recover.
Why is Newegg struggling?
Newegg is struggling due to a combination of falling revenue, high competition, poor customer service, unresolved complaints, and loss of trust after several public scandals like “ReturnGate.”
Who owns Newegg now?
Newegg is owned by Hangzhou Lianluo Interactive, a Chinese tech company. The ownership came through a reverse merger, allowing Newegg to go public in 2021 under the ticker symbol NEGG.
Is Newegg losing money?
Yes. The company reported significant net losses, $59 million in 2023 and $43.3 million in 2024. Despite having cash on hand, it is not currently profitable.
What has happened to Newegg?
Newegg went from being a trusted tech marketplace to facing credibility issues. Mishandled returns, negative customer reviews, poor communication, and declining sales have weakened its market position.
What is “ReturnGate”?
ReturnGate was a 2022 scandal in which Newegg was exposed for rejecting a valid return request from a customer. The issue went viral, revealing a pattern of denied refunds and poor service, which severely damaged the company’s reputation.
What is a reverse stock split, and why did Newegg do one?
A reverse stock split combines multiple shares into one to increase the stock’s trading price. Newegg’s 1-for-20 reverse split in April was done to meet Nasdaq’s minimum price requirement and avoid being delisted.
Is Newegg still safe to buy from?
Newegg is still functioning as a retailer, but many customers report poor service, slow refunds, and product issues. While you can buy from Newegg, it is wise to read recent reviews and understand the risks.
How does Newegg compare to Amazon and Best Buy?
Newegg once rivalled Amazon in tech retail but now lags behind due to poor service and limited logistics. Amazon and Best Buy offer faster shipping, better customer service, and more reliability overall.
What is Newegg doing to recover?
Newegg is cutting costs, downsizing operations, targeting new markets like AI tech, and updating its return policies. Whether these changes will work remains uncertain.
Is Newegg publicly traded?
Yes. Newegg trades on the Nasdaq under the ticker NEGG. It became public in 2021 through a SPAC merger.
