By Ryan Dezember and Paul Berger

Trucking and transport stocks had one of their worst days ever Thursday thanks to a firm that until recently was in the karaoke business.

The Florida firm, formerly the Singing Machine Co. and now known as Algorhythm Holdings, published a news release shortly before stock trading opened touting AI technology capable of increasing trucking efficiencies. Algorhythm, which has a stock market value of less than $3 million, hasn't landed any software clients in the U.S. yet. But its announcement nonetheless rattled the market.

By midday, logistics firms were down more than 20% in some cases. They recovered somewhat as traders and analysts zeroed in on the source of the panic. Yet billions of dollars in market value were wiped out by the closing bell.

Freight broker C.H. Robinson Worldwide dropped 15% and third-party logistics provider Landstar System fell 16%, its worst day ever. Trucker J.B. Hunt Transport Services and logistics firm Ryder System ended 5.1% and 4.3% lower, respectively. Even firms that don't have much to do with trucking were hit. Expeditors International of Washington, which arranges air and ocean shipping, declined 13%. Airlines and railroads were also caught in the frenzy.

The Dow Jones Transportation Average, which includes those companies and had surged to records with the broader market, fell 4%. It was the biggest daily decline since April, when President Trump's barrage of tariffs shook markets, for the group of stocks that investors watch as a leading indicator of economic activity. Of the 20 companies in the index, 17 ended the day lower, collectively shedding $17.4 billion of market value.

The selloff is one of the most extreme examples yet of the sell-now, ask-later ethos sweeping financial markets in the artificial intelligence era. In recent sessions, concerns about the technology's disruptive potential have rocked shares of private-credit firms, wealth advisers, insurance brokers, and providers of legal and financial data, to name a few.

"People are looking for an excuse to sell, and maybe this was it," said Brendan Hopkins, who works in investor relations for Algorhythm. "Some of these companies that sold off, they would be beneficiaries."

Hopkins said the company was shocked by the attention received by the news release, as well as the market reaction. His phone rang nonstop with analysts from Wall Street banks and financial firms around the world. So many people went to the Algorhythm's website to download the white paper promoted in the news release that the site crashed, and few could actually read the 10-page note.

Algorhythm said in its release that the AI technology of its SemiCab unit can greatly reduce empty freight volumes, which occur after a truck delivers its cargo and moves on to its next location empty. The company said its technology "is enabling its customers' internal operations to scale freight volumes by 300% to 400% without a corresponding increase in operational head count."

Until recently, the company's business was selling karaoke machines, according to securities filings. As smartphone apps and new televisions with karaoke features began to disrupt that business, the Singing Machine assets were sold for $500,000. Chief Executive Gary Atkinson went looking for a new business.

He found it in India, where SemiCab, an Atlanta-based business, was using AI to optimize trucking routes for companies. One of the holy grails of trucking is to find a way to reduce the one-third of trips that big rigs are believed to spend hauling empty trailers. SemiCab says its technology reduced so-called deadhead miles by 70%.

SemiCab founder and CEO Ajesh Kapoor said the firm is facilitating thousands of loads a month in India. By comparison, C.H. Robinson manages more than 100,000 shipments a day.

In the U.S., SemiCab is only beginning to sign up customers. Atkinson said he was surprised the white paper sent a shock wave across the transport sector. "When names like C.H. Robinson are dropping billions of dollars of market cap, it's quite staggering," he said.

As other trucking stocks tanked Thursday, Algorhythm's volatile stock surged, ending Thursday 30% higher at $1.08.

"Obviously we're happy," said Hopkins. "No publicity is bad publicity."

Write to Ryan Dezember at ryan.dezember@wsj.com and Paul Berger at paul.berger@wsj.com

(END) Dow Jones Newswires

February 12, 2026 19:29 ET (00:29 GMT)

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