Mid-May saw a round of meme stock rallies when Keith Gill, a.k.a Roaring Kitty, made a surprise return — in true meme fashion — on social media. Roaring Kitty is the trader from Massachusetts who instigated the infamous meme stock breakout in 2021 that pitted retail investors against Wall Street.
His reappearance signaled to retail investors that another meme rally was here and caused several stocks to rise by three-digit percentage points.
But these types of rallies tend not to be sustainable, which is why you might want to consider these meme stocks to sell while you still can.
GameStop (GME)
GameStop (NYSE:GME) is the quintessential meme stock, and that’s why it’s the first on this list. But the primary reason I’m including it as a meme stock to sell is that GameStop’s fundamentals and longevity prospects have been shaky for years now.
GME share price increase nearly sixfold from late April through the start of trading on May 14 before sinking over 20% by market close.
It shot up again over 20% after the video-game store chain announced it had cashed in $933 million from the meme stock surge this month.
However, this meme rally alone will not fix GameStop’s.
GameStop’s business model involves customers walking into its brick-and-mortar stores to buy video games, gaming merchandise and consumer electronics.
The problem is customers are increasingly going online for those types of solutions — something that has proven detrimental to the firm’s survivability prospects. Unless it goes back to the drawing board, GameStop has serious headwinds ahead. It makes GME stock some of the meme stocks to sell at the moment.
AMC Entertainment (AMC)
AMC Theatres (NYSE:AMC) has been hanging on by a thread for years now.
Between the lingering effects of Covid-19 — when moviegoers stayed home to Hollywood’s recent labor strikes and increasing competition from streaming services like Netflix (NASDAQ:NFLX) to being billions in debt, the movie theater chain is barely keeping above water.
Its occasional savior has been retail investors, who heavily bought its stock in 2021 and this month after Roaring Kitty’s re-emergence on X.
Another shot in its arm was singers Taylor Swift and Beyonce’s concert films — whose direct distribution deals with the company last year padded its bottom line for the time being.
But the company has a long way to go before it can become profitable again, and these random lifelines will not suffice to keep it afloat in the long term.
AMC stock’s over 100% climb on Roaring Kitty’s return this month cemented its status as a meme stock and is one you want to sell ASAP.
Blackberry (BB)
Blackberry (NYSE:BB) stock rose this month in tandem with other meme stocks, but it is a meme stock to sell while you still can.
The BlackBerry company is another casualty of being caught being on the wrong side of a fast-changing business environment — just like GamesStop and AMC in their respective niches.
BlackBerry was once a roaring success as a phone maker but was edged out of the market by Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) and Apple’s (NASDAQ:AAPL) iOS.
It has since rebranded itself as a cybersecurity and IoT software developer and had some success. For instance, for the 2024 fiscal year, it declared $853 million in revenue, with its IoT business reporting a 25% year-over-year (YOY) revenue jump.
But the same can’t be said for its stock. Its share price has declined 48% YOY and 50% from the same time two years ago.
It’s clear BlackBerry has some work to do to win back investor confidence. Until then, it’s right there with other meme stocks to sell right now.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
