While meme stocks continue to exist, their heyday appears behind us. Many of the best-known meme stocks that ran up the most in 2021 at the peak of the last market frenzy are now a pale shadow of their former selves. They’re trading at a fraction of the price they were at when retail investors executed a coordinated short squeeze on the securities.
Several meme stocks trading north of $100 per share are now penny stocks. Some have lost 99% of their value. It’s a sad outcome that resulted when the investors who pumped up these troubled companies’ share prices to unsustainable levels abandoned them, leaving the stocks to crash back down to earth. In most cases, troubled companies with questionable finances and uncertain futures remain. Here are three doomed meme stocks to dump before they dive: February 2024.
BlackBerry (BB)
Former smartphone giant turned failed Internet of Things (IoT) company BlackBerry (NYSE:BB) remains a basket case. BlackBerry’s share price has declined 20% already in 2024 and continues to slide further down the penny stock league tables. Through 12 months, the stock is down 38% and has sunk 67% over the last five years. The stock has steadily eroded since catapulting to a multi-year high in early 2021 at the height of the meme stock frenzy.
With its meme stock peak now a distant memory, BlackBerry has had to contend with a deteriorating financial position. Right before Christmas, BlackBerry reported that its quarterly net loss grew 425% from a year earlier. The company scrambled to name John J. Giamatteo its new chief executive officer (CEO) and also canceled a planned initial public offering (IPO) of its Internet of Things (IoT) business unit. But neither of those moves seems to have helped BB stock, and its share price continues to sink.
Canopy Growth (CGC)
Speaking of mounting losses, how about former meme stock favorite Canopy Growth (NASDAQ:CGC)? The cannabis producer most recently reported a net loss for its fiscal second quarter of $324.8 million on revenue of only $82 million. As it quickly runs out of cash, Canopy Growth has obtained creditor protection for its BioSteel Sports Nutrition unit. The company sold its headquarters building back to its original owner, chocolate maker Hershey (NYSE:HSY), for $53 million.
The betting is that it is only a matter of time before Canopy Growth files for bankruptcy protection. The looming prospect that the company will go out of business has its share price down 85% over the last 12 months and trading as a penny stock. Over five years, CGC stock has decreased 99%. While retail investors periodically run up the share price by executing a short squeeze on it, as was the case last September, it never lasts long. Canopy Growth is a doomed meme stock to avoid.
GameStop (GME)
GameStop (NYSE:GME) is another troubled company and meme stock that can’t get its act together. GME stock is down 16% this year, bringing its 12-month decline to 41%. The share price is down 83% from its meme stock peak in January 2021. Like the other names on this list, GameStop suffers from poor financial results and inept execution of a turnaround strategy that was supposed to position the company as the “Amazon of gaming.”
GME stock has been trending lower since the video game retailer announced financial results last December that missed Wall Street targets. Rather than acknowledge its current approach isn’t working, GameStop appears to have doubled down on its strategy, appointing investor Ryan Cohen as its new CEO and undertaking a new policy that will allow GameStop to invest what cash it has in stocks and cryptocurrencies. The news coming from the company has left many investors scratching their heads.
On the date of publication, Joel Baglole 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.