Meme stocks have had an eventful summer, with many popular shares seeing sharp rallies. While enthusiasm may not be back to peak 2021 levels, interest is certainly up.
Not all meme stocks are set to prosper, though. In fact, many of the worst meme stocks out there continue to have poor fundamentals and even cloudy forecasts. Looking at these three meme stocks, investors should ditch them now before their share prices totally collapse.
WeWork (WE)
WeWork (NYSE:WE) is a company that rents office space on a short-term basis. The company’s pleasant working spaces and desirable amenities have appealed to a wide range of workers and small businesses seeking out an alternative to traditional offices.
However, WeWork has struggled to turn a cool concept into a viable business. WeWork was heavily in debt and struggling to turn their numbers even prior to the pandemic. Enter in COVID-19, and WeWork’s financial situation has gone from bad to worse. Meanwhile, its stock is down from $10 to well under 50 cents.
The reason for the most recent decline is that WeWork has warned of a potential bankruptcy filing. That’s not surprising, as the company’s bond prices have collapsed, suggesting that even senior lenders stand to lose money. When bondholders lose, that typically means the common stockholders are wiped out entirely. All that to say that while WE stock may be a meme, it’s more likely to end up as a cautionary tale rather than a celebratory one.
Genius Group (GNS)
Genius Group (NYSE:GNS) is a small Singapore-based education company. It is more known for being a repeated meme stock than the accomplishments of the underlying business.
The company IPOed in 2022 with shares opening around $6. They quickly spiked to $30 before falling back to $6. GNS stock briefly doubled again in the summer of 2022. By December, shares had fallen to less than 50 cents. But the stock would quickly rebound to $7 amid hopes of a short squeeze and excitement around a lawsuit related to the company’s financing plans.
Nothing materialized from that, though, and Genius stock was back down to 60 cents recently. Once again, Genius shares have taken off with the stock doubling in recent days. This is seemingly tied to a possible spinoff. Short interest remains high, which might also lead to trading excitement.
The actual business, however, continues to struggle. The firm generated just $18.2 million of revenues last year and continues to lose money. The SEC also recently sent GNS a warning letter for breaching Section 401 code, which pertains to the disclosure of information. Let’s just say it’s not smart to invest in GNS stock given its poor operational results, SEC issue, and history of having a boom-and-bust stock chart.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN) is a small firm attempting to carve out a space for itself in the electric vehicle industry.
The company has released a prodigious number of press releases over the past year. Talk abounds regarding various electric vehicles, batteries, partnerships, grants, and other seemingly positive news.
Despite all this, however, it’s not clear where the rubber meets the road as it pertains to Mullen. The company has not generated commercial revenues thus far. MULN stock is down more than 99% over the past year with shares struggling to stay above $1 even after a recent reverse stock split.
Unless and until Mullen can turn its interesting business ideas into tangible commercial success, MULN stock remains a risky meme stock to avoid.
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.