Social media has largely overshadowed the fundamentals of investing with pumpamentals and put meme stocks for sale in the spotlight. Just as Bitcoin is an analog to blue chip stocks, meme stocks have also become an analog to altcoins. Both are based on narratives fed by short-term valuation increases.
But just as easily as they rose, meme stocks can also fall. Which meme stocks should be eliminated from your speculative portfolio when comparing their float short selling to declining sales and rapid cash depletion?
Let’s take a look at these three meme stocks to sell as we delve into their current performance. Some are wondering whether they may be on the verge of a downturn and therefore prime candidates for a portfolio divestment.
Rivian Automotive (RIVN)
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Since the meme stock mania began to subside in November 2021, Rivian Automotive (NASDAQ:RIVN) has fallen by 92%. At its current price of $10.10, the stock is just 0.9% away from its 52-week low of $10.01 per share. The free float is currently 20.89%.
At times like these, investors ask themselves, is this an opportunity to buy on a dip? However, in Rivian Automotive’s case, this would depend on whether it is a solid electric vehicle (EV) growth value. In the first quarter of 2023, Chief Operating Officer (COO) Frank Klein noted that the company The goal was to produce 50,000 electric vehicles until the end of the year.
So RIVN exceeded this goal with 57,232 electric vehicles for the full year 2023, achieving a 135% increase compared to the previous year (YOY) increase in production. However, that is Outlook for the full year 2024 is now flat. Regardless of the level of 57,000 reached, it is well below the previously estimated 81,700 EVs, according to the Visible Alpha survey of eight analysts.
Additionally, this decline is exacerbated by Rivian Automotive’s continued losses per vehicle manufactured. Although the company increased its revenue by 167.43% year-on-year through the end of December 2023, the automaker suffered a net loss of $5.43 billion. With a loss of $6.7 billion in 2022 and a loss of $4.6 billion in 2021, RIVN’s cash burn is unsustainable given the now stagnant demand.
Tupperware brands (TUP)
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Despite strong valuation spikes in August 2022 and July 2023 Tupperware brands (NASDAQ:TUP) is trending downwards continuously and has lost 93% of its value since November 2021. At $1.20 per share, TUP is still 50% away from its 52-week low of $0.61.
This scenario is likely for several reasons. Although Tupperware is a long-standing household brand, its direct-to-consumer business model faces an inexorable decline against e-commerce giants like Tupperware Amazon (NASDAQ:AMZN).
The business model is complicated by the dilution of the brand identity, making the term “Tupperware” a product class that has nothing to do with the company itself. Although Tupperware Brands tried to correct its core business model by approaching it Goal and Amazon sales have not improved. For the full year 2022, published in March 2023, Tupperware reported an 18% year-over-year net sales decline.
Most recently, on March 29, the company submitted a delay for full-year 2023 results. Ahead of the likely new low above the 52-week low, TUP shareholders should consider cutting their losses.
Allogeneic therapeutics (ALLO)
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Founded in 2017, Allogeneic therapeutics (NASDAQ:ALLO) has increased by 9.4% since the beginning of the year (course of the year). At $3.96, the stock is currently 43% above its 52-week low price of $2.23 per share. This biotech stock represents exposure to novel therapies for blood cancers and solid tumors.
Although the company holds one wide pipeline Although there are many potentially promising treatments based on CAR T-cell technology, a broad portfolio of existing revenue-generating drugs is missing. For the full year 2023 Allogen reported a net loss of $327.3 million, or $2.09 per share.
Looking ahead to 2024, the company expects losses to decline further and cash and cash equivalents to deplete. That could be up to $190 million of the existing $448.7 million stack. Given the highly experimental nature of its product lineup and regulatory approval hurdles, the company will likely seek new funding before it runs out of funds in 2026.
Investors with low risk tolerance for so many unknowns should look to review their ALLO holdings. Currently at $3.96, ALLO shares are below the low Nasdaq estimate of $4.4 in 12 months, based on 19 analyst filings. However, if the bet works, ALLO stock could rise to as much as $35 per share.
At the time of publication, Shane Neagle did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.