Stocks to sell

3 Miserable Meme Stocks to Sell While You Still Can

For many investors, 2023 was a time to take risk off the table. However, the recent musings by Federal Reserve chair Jerome Powell have investors going to sleep with visions of rate cuts dancing in their heads. If you’re looking to put some capital to work in the market, meme stocks could be a popular choice.  However, there are several meme stocks to sell that are quickly burying themselves.

It’s understandable. However, many stocks are cheap for a reason, and that’s the case with many meme stocks. When you combine that with lackluster revenue and/or earnings growth (if the company is profitable at all), and negative analyst sentiment and these meme stocks become a heavy lift for retail traders and investors.  

This is the time of year for tax-loss harvesting. Also, while it’s also a season of peace and goodwill, that doesn’t mean you have to sit on losses. If you own any of the three meme stocks below you can sell them before the close of trading on December 29, 2023. If you still like them on Groundhog’s Day you can buy them back. Chances are they won’t have gone anywhere.  

GameStop (GME)

An empty GameStop (GME) store in Dresden, Germany.

Source: 1take1shot / Shutterstock.com

GameStop (NYSE:GME) is really two stocks with two different stories. On the one hand, you have GameStop which is the Blockbuster Video of video game stocks. It has an outdated, and dying, business model. Most games, and certainly the most popular titles, are available via digital downloads. 

Then you have GME stock, the OG among the meme stocks and slayer of hedge funds. Since its epic short squeeze in 2021, GameStop has never been able to relive its past glory, but that doesn’t stop investors from trying. 

The company is relatively debt free, approaching positive earnings, and is sitting on a pile of cash. That can keep this cat-and-mouse game going for awhile. But ultimately, investors have to ask where the growth will come from.  

GameStop’s board of directors approved a plan in which the company—and specifically CEO Ryan Cohen—can invest in equity securities, among other investments. Put me down in the skeptical category. Besides, as Wedbush notes, the board seems to believe that the company can achieve better results by investing in other companies instead of their own.  

It’s an odd bet, and one that could, in theory, pay off. However, that doesn’t mean you can’t wait until Mr. Cohen proves himself.  

AMC Entertainment (AMC) 

Mobile phone with logo of AMC Entertainment Holdings (AMC). Pumping stock exchange prices by Reddit investors. Playing on market, manipulation. Losses, crisis.

Source: Ira Lichi / Shutterstock.com

AMC Entertainment (NYSE:AMC) is another of the meme stocks that is struggling to reclaim its past glory. Prior to 2020, attendance at movie theaters was in decline. I mention that because despite several blockbuster movies in 2023, AMC reported that attendance is still not at 2019 levels.  

The company recently completed a $350 million at-the-market offering. It used part of the proceeds from the offering to shave off about $62 million in debt. It still leaves the company with approximately $4.4 billion in debt to manage through. Also, the amount of debt exceeds its market value by a wide margin.  

However, let’s be clear. This remains a revenue story first and foremost. While the company’s situation isn’t as dire as that of GameStop, it’s still an issue.  

For example, in its just completed quarter, the company generated revenue of $1.4 billion. That was after a quarter with several blockbuster movies such as Oppenheimer, Barbie, and Taylor Swift: The Eras Tour. It was a solid year-over-year gain.  

However, as my InvestorPlace colleague Marc Guberti points out that revenue was against soft comparisons to the prior year. Also, with many releases delayed due to the (now resolved) writer’s and actor’s strike, it will be hard pressed to repeat those numbers. 

Anecdotally, many people still attend movies. Factually, not enough of them are attending to make AMC stock a buy.  

Mullen Automotive (MULN) 

Mullen Automotive (MULN) brand logo. American automotive and electric vehicle manufacturer

Source: Robert Way / Shutterstock.com

Investors in Mullen Automotive (NASDAQ:MULN) are finding out that making electric vehicles is a cash-intensive business. In fact, by now they’re tired of hearing about it. However, that’s exactly what they heard on Dec. 19.  

In a letter to shareholders, CEO David Michery announced the company’s plans to institute a 1-for-100 reverse stock split. The split was approved at a special meeting of shareholders. The move was done largely to prevent MULN stock from being delisted on the Nasdaq exchange.  

Fair enough, but this is the third reverse stock split the company will execute this year. Also, the third time may not be the charm because Michery has made it clear that the company still needs to raise cash to get through next year. Granted, that will be easier if it remains on the Nasdaq. However, without a clear path to consistent revenue, let alone, profit, MULN stock is one to avoid. This and the other meme stocks to sell we mentioned should be avoided like the plague.

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.     

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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