The meme stock craze was an exciting and crazy time for investors. Fortunes were seemingly won and lost as retail traders pushed the shares of struggling companies to unsustainable levels through coordinated short squeezes. Professional short sellers on Wall Street lost billions of dollars and some were pushed to the brink of collapse by the meme stock rally. The phenomenon quickly entered the pop culture zeitgeist and gave us characters such as Roaring Kitty and catchphrases such as “to the moon!” and “diamond hands.” While short squeezes persist and the meme stock craze hasn’t completely run out of steam, there are many once high-flying meme stocks that have been abandoned by the retail investor crowd on the WallStreetBets Reddit forum. These stocks look unlikely to return to their former heights and should be avoided. Here are three risky meme stocks that just have no more hope left.
Canopy Growth (CGC)
Cannabis stocks have been caught in multiple short squeezes in recent years, including Canopy Growth (NASDAQ:CGC), which at one time was the largest marijuana producer in Canada where the recreational drug is legal on a national level. In February 2021, at the height of the meme stock craze, CGC stock peaked at $42.93 a share. The stock is now trading for 52 cents. On June 23, Canopy Growth’s stock fell 14% after the company reported a quarterly net loss of $648 million Canadian ($490 million U.S.).
Canopy Growth’s net revenue for its fiscal quarter ended March 31 was 14% lower than a year earlier. Since February of this year, the company has let go 800 employees and sold most of its production facilities. It recently moved out of its corporate headquarters and into a smaller space. Canopy Growth has also had problems with the financial results reported by its BioSteel sports drink division. BioSteel made “material misstatements” in previous financial filings, requiring Canopy Growth to refile three of its past quarterly financial statements.
Run don’t walk from Canopy Growth because this meme stock definitively has no more hope left.
BlackBerry (BB)
Another once successful Canadian company that has become popular with the risky meme stocks crowd is BlackBerry (NYSE:BB). The company was the dominant maker of smartphones until Apple (NASDAQ:AAPL) introduced the iPhone in 2007. BlackBerry has since gotten out of the cell phone game and pivoted to become a software company that specializes in cybersecurity and the IoT. However, BlackBerry is now a shadow of its former self and continues to struggle financially.
The company’s financial woes have not deterred retail investors from executing multiple short squeezes on BB stock. In January and June 2021, BlackBerry’s share price was pushed above $14 a share only to quickly crash back to earth. Today the shares flirt with sliding into penny stock territory. In May of this year, the company announced that it is undertaking a strategic review of its business.
This past March, BlackBerry sold 32,000 patents related to its former mobile devices, messaging, and wireless networking business for $900 million as the company seeks to raise cash.
AMC Entertainment (AMC)
Down 68% in the last 12 months and having suffered a 75% drop over the past five years, is there any hope left for movie theater chain AMC Entertainment (NYSE:AMC)? One of the most popular risky meme stocks, AMC shares were trading just under $60 in June 2021. Today, the stock is sitting at $4. Its 52-week high was $27.50. While the company managed to survive the pandemic when its more than 10,000 movie screens were either closed or forced to operate at reduced capacity, the company is still struggling. AMC is now looking to issue more equity and execute a reverse stock split.
AMC Entertainment is also laboring under $4.94 billion of debt that it racked up during the Covid-19 crisis. While people have begun to return to movie theaters, the U.S. box office is still struggling. In this year’s first quarter, box offices brought in $1.8 billion, which was 25% lower than pre-Covid 2019 levels. AMC is also contending with the rise of streaming services that took off during the pandemic and shifting consumer habits. In time, AMC might recover. But its stock looks to have been left behind by the meme stock crowd.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
