7 Meme Stocks That Might Actually Be Worse Bets Than AMC

Stocks to sell

With the “risk on” mentality of late 2023 fading fast thus far in 2024, it may be a good time to decide what are the meme stocks to sell. Mostly, because even if the macroeconomic picture improves this year, many of the most popular meme plays lack the fundamentals necessary to sustain their current stock prices.m Much less, justify a move to higher prices.

A good example is with AMC Entertainment (NYSE:AMC), which as you know was at one point one of the most popular meme stocks out there.

As I recently argued, AMC (which just hit new lows) is likely poised to head lower. This is because of both continued shareholder dilution, plus grim box office forecasts for 2024 (which point to little improvement in AMC’s operating results).

But if AMC has poor prospects, keep in mind that many other meme names have similarly poor, if not worse, prospects than this former “meme king.”

That’s the story here with these seven meme stocks to sell. Head for the exits, before economic reality once again outweighs the hope and hype.

C3.ai (AI)

Source: shutterstock.com/Tex vector

“AI mania” propelled artificial intelligence software provider C3.ai (NYSE:AI) to significantly higher prices last year. Trading for just over $10 per share in January 2023, by last summer shares zoomed to prices nearing $50 per share.

AI stock has since pulled back, and in recent months has stayed range bound between $25 and $30 per share. However, even as the stock trades considerably below its 52-week low, substantial downside risk remains. The generative AI trend has yet to translate into materially stronger results for the company.

Last quarter, revenue increased just 17% year-over-year. Net losses rose more than fourfold. Forecasts for the coming fiscal year (ending April 2025) suggest only modest improvements to fiscal results (19.5% revenue growth, halving of losses). As C3.ai’s actual growth keeps falling short of perceptions, the stock could cough back more of its “mania”-induced gains in 2024.

AST SpaceMobile (ASTS)

Source: Andrey Suslov / Shutterstock.com

AST SpaceMobile (NASDAQ:ASTS) has come back into favor among speculators since the fall. Shares in the early-stage space-based cellular telecommunications company more-than-doubled from late October through late December.

However, ASTS stock has pulled back, and instead of being one of meme stocks to buy in order to ride momentum, consider it now one of the top meme stocks to sell, as concerns about the company’s long-term potential come back into focus.

Although AST SpaceMobile is making progress attracting strategic investors to fund its further buildout, as a Seeking Alpha commentator recently argued, competition from SpaceX’s Starlink service may limit ASTS’s ability to move from the pre-revenue to revenue stage.

The strategic investments are also likely to be highly dilutive to existing investors. All of this could mean a crash landing for the stock, after its “to the moon” late 2023 rally.

Blackberry (BB)

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Unlike other former “meme kings,” Blackberry (NYSE:BB) didn’t receive much of a boost during the latter months of 2023, but like most speculative stocks, shares in the former phone maker (now a cybersecurity and IoT company) are trending lower.

The market’s waning enthusiasm for risky plays is not the only reason for BB stock’s declines. Investors also reacted negatively to the company’s latest fiscal results. Although earnings beat expectations, revenue fell short of forecasts. More importantly, Blackberry’s guidance updates were hardly cause for celebration.

As I argued back in December, while Blackberry has a potential needle-moving catalyst in the works (a spinoff of its IoT segment), the combined company’s poor fiscal performance is likely to persist. Even after falling back to multi-year lows, more declines may be in store. Take a second look at BB once the spinoff draws near, but for now, stay away.

Carvana (CVNA)

Source: Ken Wolter / Shutterstock.com

Few investors believe Carvana (NYSE:CVNA) will surge more than tenfold in 2024, as it did in 2023. Not only is it questionable whether CVNA stock will “knock it out of the park” again, it’s questionable whether it will give back just a small amount of last year’s tremendous gains.

Thanks to a debt restructuring, the company avoided having a “game over” moment. The specter of lower interest rates points to better results ahead for the company.

Nevertheless, CVNA is one of the meme stocks to sell. Even as the forecast for the U.S. used car market in 2024 isn’t necessarily dire, Carvana should report another year of high losses and lackluster revenue growth. A lack of sufficient additional progress with Carvana’s turnaround could drive further losses for CVNA shares.

Faraday Future (FFIE)

Source: T. Schneider / Shutterstock.com

It’s far too late to declare that Faraday Future (NASDAQ:FFIE) is one of the meme stocks to avoid. After all, over the past twelve months, shares in this early stage electric vehicle maker have declined in price by a staggering 99.4%.

But after this massive price decline, some may believe FFIE stock has minimal downside risk, and that any bit of positive news could send it considerably higher. Unfortunately, this is an erroneous take. Like other “EV also-rans,” this company has raised considerable amounts of cash, burning through said cash with little to show for it.

Even if the market resumes warming back up to speculative growth stocks, it’s debatable whether Faraday can raise the additional funds necessary to sustain operations. With this, it makes sense that my InvestorPlace colleague, Omor Ibne Ehsan, believes that Faraday Future will be the next floundering EV startup to file for bankruptcy.

Marathon Digital (MARA)

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Following Bitcoin’s (CCC:BTC-USD) recent rebound, you may question why I’m considering Marathon Digital (NASDAQ:MARA) one of the top meme stocks to sell.

Shares in this Bitcoin miner are up more than sixfold since last January, as rising BTC prices, plus news of record production levels, point to stronger results just around the corner.

However, after the big run-up, enthusiasm for BTC has calmed down as of late. Higher prices and increased production notwithstanding, high overhead costs have analysts forecasting a swing from positive to negative earnings this year.

The potential for Marathon to beat expectations is already well-baked into the stock price. Shares are right now “priced for perfection,” which leaves them vulnerable to big price declines, if things working in the company’s favor (BTC price trends) stop working in its favor. Hence, with MARA, take profit if you own it, sell/avoid if you don’t.

Mullen Automotive (MULN)

Source: rafapress / Shutterstock.com

If you thought Faraday Future was the biggest decimator of capital among EV companies, take a look at Mullen Automotive (NASDAQ:MULN).

Similar to FFIE, this early stage EV maker has raised hundreds of millions through the dilutive sale of new shares. Also like Faraday, Mullen has burned through this cash, and remains in urgent need of additional cash.

This has resulted in MULN stock dropping like a stone, from a split-adjusted $9,405 per share last January, to just over $13 per share today. Sure, Mullen’s future may not be as bleak as Faraday’s future. This startup has at least made production progress, and recently hit a vehicle production milestone.

Again though, Mullen needs to raise more capital, in order to both absorb operating losses, and to finance its further expansion. The additional shareholder dilution resulting from this could drive another round of high split-adjusted losses for MULN shares.

On the date of publication, Thomas Niel held a long position in Bitcoin. He did not hold (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.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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