Stock markets are soaring. With positive vibes in the air, traders are giving penny stocks a second look in hopes of locking in some quick gains during this major bull market run.

However, folks should still proceed with caution. Most penny stocks end up with low share prices due to some major structural problem with the business. Unfortunately, those may include an unproven business model or creaky balance sheet. These three penny stocks to sell face a rough 2024, regardless of the economy and equity markets performance this year.

Tilray Brands (TLRY)

Investors’ hopes for the cannabis sector have largely gone up in smoke. Tilray Brands (NASDAQ:TLRY) is no exception. In fact, shares are down more than 90% from their initial public offering (IPO) price.

An initial gold rush mentality had hit the cannabis space. Many management teams seemingly believed that if they built out a business, consumers would automatically buy their goods. However, uptake of recreational cannabis has fallen short of initial expectations in markets such as Canada. So, excess inventory and woeful profit margins have plagued companies.

Also, Tilray Brands tried to make the most of a challenging macroeconomic environment. It has pivoted business strategies several times, most recently with a surprising move into craft beer and beverages. Regardless, Tilray continues to run massive losses. Short sellers have called out Tilray Brands, suggesting some questionable dealings. And most importantly, earnings continue to disappoint quarter after quarter.

Perhaps the marijuana sector will finally turn the corner. Positive rumblings are sounding on the legal front in the U.S. However, for TLRY stock, it seems like it will be too little, too late.

FuelCell Energy (FCEL)

FuelCell Energy (NASDAQ:FCEL) develops and sells fuel cell and electrolysis platforms. It has the intention of offering renewable power while helping decarbonize the energy grid. Unfortunately, the company’s technology simply doesn’t appear to be what its clients want.

As of October 31, 2023, FuelCell Energy has amassed an accumulated shareholder deficit of more than $1.5 billion. This means that the company has blown through well over a billion dollars of shareholder funding over the decades with little to show for it.

FCEL’s revenues have shrunk compared to a decade ago. Meanwhile, the company hasn’t generated a year of positive net income even once over the past decade. FuelCell Energy’s products simply haven’t found a favorable reception with potential clients despite having an enormous amount of time and money.

Good ways exist when investing in hydrogen stocks, including these three top picks. Unfortunately, FuelCell Energy isn’t one of those firms that can prosper amid current market conditions in the hydrogen space.

Fisker (FSR)

The electric vehicle (EV) sector is in a slump.

While this may be a healthy correction for leaders like Tesla (NASDAQ:TSLA), a lot of smaller EV firms are unlikely to survive this downturn. Fisker (NYSE:FSR) is one of those struggling EV companies that is in great danger.

The first iteration of Fisker went bankrupt a decade ago. The founder returned with a new company seeking to profit from the growing EV market. However, this go-round also appears heading toward a dead end. It seems that the company has prioritized making a nice vehicle over profitability.

It’s great to make an attractive product, of course. But if Fisker can’t sell its EVs for a profit, the company will not be long for this world. Given its massive operating losses, Fisker already scaled back production in late 2023 to preserve the remainder of its balance sheet. Additionally, Fisker’s potential delisting from the New York Stock Exchange appears to be the next blow for this slumping penny stock to sell.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Ian Bezek 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.