Penny Drops: How Popular Tech, Meme, EV & Pot Stocks Went From Pricey To Pocket Change In 4 Charts
The stock market had a challenging 2022 due to macro and geopolitical headwinds, with high-profile names suffering losses. The S&P 500 lost about 20%, and the Nasdaq Composite dropped around 33%.
Even industry giants like Tesla Inc (NASDAQ:TSLA) experienced significant declines. Many heavily-valued stocks suffered losses due to industry-wide concerns, including startups in the electric vehicle industry. A major investment bank, Credit Suisse AG (NYSE: CS), faced compliance failures and dwindling business, leading to regulatory scrutiny and a record-low stock price before being rescued by UBS Group AG (NYSE: UBS).
See Also: Best Penny Stocks
Here’s a Benzinga-compiled list of some of the fallen angels:
The Mean Memes: The meme stock frenzy saw some retail darlings shoot up thanks to social media backing from retail investors. WallStreetBets, a Reddit thread, allegedly facilitated stock price manipulation. The buying frenzy was also fueled by stimulus checks and discount brokerages. Many of the stocks that surged belonged to COVID-relevant companies. As the pandemic subsided, most meme stocks crashed from stratospheric levels.
AMC Entertainment Holdings, Inc. (NYSE:AMC): The movie-theater chain’s stock picked up momentum in early 2021, going from penny stock territory and topping out at $72.62 in early June 2021. Since then, it has erased much of its gains.
Bed Bath & Beyond, Inc. (NASDAQ:BBBY): The home improvement retailer was seen as a poster child of the meme phenomenon amid the frenzy but has since then seen its fortunes wane. The company is currently teetering on the brink of bankruptcy.
Newegg Commerce, Inc. (NASDAQ:NEGG): This online retailer of computer and electronics products was leveraging on its status as a COVID-19 play. It created a stir by accepting Dogecoin (CRYPTO: DOGE) as a payment option when the meme coin's popularity soared. After a sharp spike in the middle of 2021, the stock bubble burst.
Silvergate Capital Corp. (NYSE:SI): Silvergate’s subsidiary the Silvergate Bank, which lent heavily to crypto purchases, was caught in the crosshairs of the FTX bankruptcy and announced shuttering of operations in early March. The parent company’s stock is now a pale shadow of its old self, moving from $108.11 in Aug. 2022 to just a little over $1.5.
Tech's Toll: Among the fallen angels are two stocks from the e-commerce space. Farfetch Ltd. (NYSE:FTCH) and Boxed, Inc. (NYSE:BOXD) have both lost much of their sheen seen in their heydays. Hawking over the internet has not worked wonders for these companies.
Farfetch is a British-Portuguese online luxury retailer which sells products from around the world. Boxed, meanwhile, functions as an online, membership-free wholesale retailer that directly delivers bulk-sized packages via the Boxed app or website.
Rackspace Technology, Inc. (NASDAQ:RXT): The positive sentiment toward the cloud computing industry has not rubbed off on this company, which is based out of Windcrest, Texas and promotes itself as a provider of multi-cloud solutions across apps, data and security. Following its high-profile IPO in Aug. 2020, the stock found some momentum until April 2021, It has been on a steady decline since then.
Virgin Galactic Holdings, Inc. (NYSE:SPCE): Shares of this Richard Branson-owned space technology company, have not taken off despite the high-profile promotion and the hype surrounding the potential for space tourism. The negative sentiment can be traced back to its multiple failed attempts.
Powering Off: Most EV startups, including even high-profile ones such as Lucid Group, Inc. (NASDAQ:LCID), have sold off heavily in the past couple of years.
Among the ones that have had precipitous drops are:
- Electric trucking solutions company TuSimple Holdings, Inc. (NASDAQ:TSP)
- EV truck maker Nikola Corp. (NASDAQ:NKLA)
- The Lion Electric Company. (NYSE:LEV), a Canada-based manufacturer of commercial EVs, including yellow school buses, public transit buses, semi-trucks, bucket trucks, and garbage/refuse trucks
- Arcimoto, Inc. (NASDAQ:FUV), a manufacturer of two-seat, three-wheeled fun utility vehicles
Cannabis High Wears Off: Tilray Brands, Inc. (NASDAQ:TLRY), a Canadian medical cannabis company, has had a steep plunge from $300 a couple of months after its listing in July 2018.
Integrated cannabis company Canopy Growth Corp. (NASDAQ:CGC) has also faced a tough predicament and has lost about 78% over the past year.
Even with depressed prices, most of these stocks may not be worth accumulating, given the risks they pose and the macro uncertainties that haven't settled yet. That said, the ones with better fundamentals can always make a comeback when headwinds cease to be a pushback.
Michael Feehan, Ramakrishnan. M and Brent Slava contributed to the story
