7 Hot Meme Stocks of 2022 to Sell Before 2023
As we enter the new year, it’s time to go through your portfolio and discover which meme stocks to sell.
In many ways, I believe that 2022 can be viewed as the year of “the baby and the bathwater” for U.S. stocks. By that, I mean, of course, that both horrible, overvalued stocks and good stocks have taken huge hits this year.
The vast majority of 2021’s meme stocks to sell were in the bathwater category, and most of that bathwater has been thrown out. Nonetheless, there are still many one-time meme stocks to sell if you still own them.
For risk-tolerant investors, some of these meme stocks are good names to sell short.
|Bed, Bath & Beyond
Ocugen (NASDAQ:OCGN) excited many retail investors in 2021 after the company signed a profit-sharing deal with an Indian company, Bharat Biotech, that developed a coronavirus vaccine.
Under the deal, Ocugen was entitled to 45% of the profits generated by the shot in the U.S. However, based on the FDA’s history and my belief that the agency tends to be fairly deferential to large American drugmakers, I was very skeptical about Ocugen’s ability to get Bharat’s shot approved in America.
OCGN has retreated 75% in the last year.
Now Ocugen is still trying to advance Covaxin, but it seems clear that the mRNA shots have become dominant in the U.S., and there are still no signs that the FDA would approve a Covid vaccine made in a foreign country, making this one of the meme stocks to sell while you still can.
The other therapies in the company’s pipeline are complicated, expensive to develop and a long way from being commercialized, if they ever are. As a result, the company down the road will probably have to sell many more of its shares, pushing down the value of its stock further.
Given the company’s situation, by the end of next year, OCGN stock is likely to fall below $1.
At one time, I thought that GameStop (NYSE:GME) could launch a thriving e-commerce business focused on consumer electronics, but I see no evidence that such an initiative is underway. The company did not mention its e-commerce business in its last earnings press release or on its last earnings call.
Instead, the company is focused on cost-cutting.
GameStop’s sales slumped a discouraging 8.5% year-over-year last quarter, while its loss per share came in at 31 cents, and the company does not seem to have a strategy to rejuvenate itself.
The company had $1 billion of cash and only $575 million of cash as of the end of Q3, so maybe it will make a game-changing acquisition (no pun intended) at some point.
Bed, Bath & Beyond (BBBY)
Bed, Bath & Beyond (NASDAQ:BBBY) seems headed for bankruptcy. In fact, S&P Global has said that, due to the retailer’s dent exchange offers which would provide creditors less than what they were owed, it has already basically defaulted on its debt.
If the offers, which BBBY recently extended, are accepted, S&P stated that its credit rating on BBBY will become “Selective Default,” and its rating on the notes will drop to “D.”
Also discouraging is the decision by Chewy’s (NYSE:CHWY) founder Ryan Cohen to unload his “bullish bets” on BBBY stock back in August. The background of its current CEO, Sue Gove, isn’t too encouraging. Gove served as CEO of Golfsmith International for 19 months, departing in 2014. In 2016, the company declared bankruptcy.
BBBY is one of the better meme stocks to sell.
Coinbase (NASDAQ:COIN) hasn’t been a good bet for a while and the collapse of FTX has greatly undermined trust in crypto exchanges in general.
On Dec. 9, Japanese bank Mizuho cut its rating on COIN to “underperform” from “neutral.” The firm thinks that Coinbase’s interest income may come in below analysts’ average estimate in 2024.
On Dec. 8, Coinbase CEO Brian Armstrong said that the company’s revenue would be “about half..or less” of its 2021 sales. In light of all the issues COIN is facing, I think we’ll find out that it’s going to be much less, while 2023 overall will be a disaster for the firm.
AMC (NYSE:AMC) may be one of the more interesting meme stocks to sell. Blockbusters won’t save this company.
The latest illustration of the weakness of movie theaters was the poor performance of Disney’s Avatar sequel. In its debut last weekend the sequel generated a relatively paltry $134 million.
And ominously for AMC, its lenders are reportedly working on developing a united front towards it and have hired “restructuring advisors.” Additionally, its competitor, Cineworld, has already gone the bankruptcy route, and AMC’s operating cash flow in the 12 months that ended in September was -$549 million.
Even more discouragingly, its paying monthly average users plunged 37% YOY and 24% versus the previous quarter. Clearly, the company’s business is in free fall.
The company is making one good move by looking to partner w2ith the NFL and the UFC on its games. But it did not provide any details about that initiative, and it’s doubtful if that effort6 will be enough to get the company back to growth.
Two attributes that the Street abhors at this point are any connection to the real estate sector and unprofitable companies.
Unfortunately for Opendoor (NASDAQ:OPEN), which focuses on buying houses quickly at relatively low prices and then flipping them, it has both attributes.
The company’s business has burned through $555 million of cash in the 12 months that ended in September.
And the Street’s aversion to real estate is quite understandable. That’s because, with interest rates looking set to stay relatively high throughout 2023, the sector’s struggles are likely to continue throughout next year.
Moreover, many current homeowners probably won’t want to sell their houses because they obtained very low interest rates during the pandemic through refinancing and would have to shift to much higher rates if they buy a new home. As a result, Opendoor won’t have very many opportunities to buy homes to flip (or to sell homes) to new owners.