3 Meme Stocks That You Still Need to Sell (That Means Now)

Stocks to sell

The speculative juices are flowing at full force right now. The cryptocurrency market is reaching new heights, and all sorts of new coin projects are taking off. On the equity side of things, quantum computing, AI, and semiconductors are among the flourishing growth sectors.

Investors could be forgiven for thinking that we’re back in 2021, giving the speed of gains across many asset classes. And 2021, after all, was famous for its short squeezes and meme stock mania.

However, as we have seen over the past few years, in the long term, it’s dangerous to invest in unprofitable companies with struggling or unproven business models. Many of 2021’s meme and short-squeeze stocks have been long since forgotten.

And while speculative stock enthusiasm is building again, you don’t want to get stuck holding bad picks. These three meme stocks to sell are on a dangerous path, and shares are likely to tumble in the coming weeks and months.

AMC Entertainment (AMC)

AMC Entertainment sell off continues as stock sees tenth straight losing day, as the markets continued to see volatility following Federal Reserve Chairman's speech.

Source: TY Lim / Shutterstock.com

AMC Entertainment (NYSE:AMC) was one of the blockbuster stocks of the first meme stock era. Traders gravitated to the company as a well-known brand that was simply down on its luck due to the adverse effects of the COVID-19 pandemic. Investors gave the company tons of attention, capital, and even went to see showings at the company’s theaters in a bid to turn AMC around.

However, AMC has not been able to take advantage of this opportunity. Management has seemingly squandered much of this goodwill through baffling decisions, such as investing in a gold mining company that had no apparent synergies to AMC’s business. In addition, AMC has engaged in heavy dilution of shareholders, which has resulted in a stunning decline in the firm’s stock price.

Like a long-running movie franchise that has lost the plot, AMC’s bull case has similarly grown stale. Recently, for example, AMC announced that it expanded its branded popcorn distribution to additional grocery stores such as Kroger. AMC has about $4.6 billion in long-term debt and lost $397 million over the past 12 months. The company would have to sell an incredible amount of popcorn at grocery stores to make a dent in those figures.

More broadly, what is going on here should be evident. The box office is still struggling. There have been complaints about the quality of the new picture line-up, and streaming competition isn’t helping matters either. AMC is still losing large amounts of money, and time is running out for this former meme stock darling before the curtains fall.

Bigbear.ai (BBAI)

Automated stock trading concept. Robotic hand analyzing financial data on stock exchange, artificial intelligence utilization to predict precise price change in stock market. Trailblazing. trillion-dollar ai stocks. AI Stocks with Potential. stocks to buy. Strong Buy AI Stocks

Source: Owlie Productions / Shutterstock.com

Bigbear.ai (NYSE:BBAI) has a great name for the current moment. In a time when cryptocurrencies with goofy names are taking off and AI is all the rage, an animal combined with AI has a great meme element to it.

Unfortunately, there’s not much more to Bigbear.ai’s bull thesis than the cool corporate name. Bigbear.ai came about from a SPAC, and like many SPACs, it has failed to live up to expectations. In its 2021 SPAC presentation, Bigbear.ai forecast 40% annualized revenue growth. Yet, in 2023, it generated less than 1% revenue growth. 

The last earnings report continued the string of disappointments. BigBear.ai reported a net loss far larger than expected, while revenues also missed the mark. It’s important to realize that BigBear.ai is focused on more industrial and defense-oriented uses of AI technology, and as such, does not have much in play in terms of the generative AI and consumer side of the equation. 

BBAI stock dropped sharply following its downbeat earnings report. Despite the decline, the company still has a market capitalization in excess of $500 million. That seems way too high given the firm’s stagnant revenues, operating losses, and inability to convert the current wave of AI enthusiasm into commercial traction.

Wimi Hologram Cloud (WIMI)

Holographic earth and digital pattern. representing WiMi Hologram Cloud Stock

Source: Shutterstock

Wimi Hologram Cloud (NASDAQ:WIMI) is a technology company that focuses on holographic services and products. Operating three business segments, Wimi Hologram Cloud offers: AR Advertising Services, AR Entertainment, and Semiconductors.

The company gained significant attention in 2021 thanks to the rise of the metaverse stocks theme. Investors are looking for the next big play in augmented and virtual reality solutions, and Wimi Hologram offers products in these fields. To its credit, Wimi Hologram already has significant commercial operations; the company generated $74 million in revenues over the past 12 months.

However, revenues from the core business have been declining since their 2021 peak. As such, Wimi Hologram has seemingly pivoted from its core business to latch onto newer trends. Last summer, the company announced an AI Assistant, but this seemingly hasn’t amounted to much. So, the company is going into crypto payments services now that cryptocurrency prices are rising again.

In addition, WIMI stock also seemingly surged recently due to the rally in another company with the word Hologram in its name. Needless to say, investors should be skeptical of WIMI shares given the highly speculative reasons underpinning the firm’s recent rally.

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.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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