Why You Should Avoid Meten Holdings Stock

If there’s ever been a case of making something bigger than it is, it could be Meten Holdings Group (NASDAQ:METX). And if you need me to spell that out for you in English, the recommendation for investors is to “avoid” METX stock at all costs or rather, at any price.

delisted stocks concept image of delist Chinese stocks from US stock market
Source: Akarat Phasura / Shutterstock.com

Meme stocks. There’s been a couple which are coming out the other side in better shape than where they started in 2021. And they’ve been widely celebrated and reviled.

I’m talking about GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC). And unless you’ve had your head in the metaverse for the entirety of this year, neither needs any introduction at this stage in the game.

But make no mistake, successful and lasting rallies following bull raids in meme stocks are the exception to the rules of engagement.

Most of this year’s campaigned short-squeezes or bullying of ultra-low float, low-cap stocks – with zero street coverage backed mostly by the number of mentions, hashtags and cute gifs and that sort of garbage on Reddit’s r/WallStreetBets and other social media forums – has ended very poorly.

From Meta Materials (NASDAQ:MMAT) to Sundial Growers (NASDAQ:SNDL), Newegg Commerce (NASDAQ:NEGG) or Digital World Acquisition (NASDAQ:DWAC) and many more like them, the list of meme stock casualties is a significantly larger than GME, AMC and maybe one or two others that could turn into something bigger.

Is METX Stock Another Lesson?

And if you don’t see the writing on the wall, another lesson in-the-making could be METX stock. METX who? Some are already all too aware of Meten Holdings and I’m here to warn investors from buying into the silliness.

In brief, Meten Holdings Group is a China-based education outfit specializing in English language training (ELT) for Chinese students and professionals.

And in the pursuit of that business, late last month METX announced less-than-stellar losses marked by a year-over-year double-digit sales decrease and deteriorating margins. Whoop whoop? I didn’t think so.

The ammo and meme stock, card-carrying membership is Meten’s pivot or more accurately, its 720 degree pirouette into a new business initiative with focus on cryptocurrency and blockchain.

And that’s supposed to impress investors? Yeah, and I’m a monkey’s – or rather an ape’s uncle.

METX  Weekly Price Chart

Meten Holdings Group (METX) gap and rally on massive Redditt style feeding frenzy and subsequent classic meme stock retreat


Source: Charts by TradingView

There’s a saying that when looking overseas to China for guidance, “can a billion people be wrong?” Well, how about a vote of buying power totaling around 4.5 billion shares and upward of a 50-fold increase over METX’s monthly volume totals?

It happened in late October into early November in the Chinese small-cap as shares surged, relatively of course, from about 30 cents to 75 cents on the back of a few Redditors. And guess what happened next? I’m confident you know the answer already.

Today and a handful of weeks later, shares are right back at 30 cents, and nobody is talking. Or more accurately, the meme stock shenanigans found on Reddit and other similar spots, have turned rather quiet with just one mention yesterday.

Are you surprised about the state of METX stock? You shouldn’t be.

What might be surprising is even at its roughly eight-fold best of hype of folly as shares rocketed higher, and I use the term loosely, total mentions peaked at, drum roll please – a miniscule count of 9.

The point of this lesson is, if there’s a Brooklyn Bridge that’s being sold, METX is a candidate in that capacity and best avoided at any price in today’s market.

On the date of publication, Chris Tyler 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 Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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