Meme stocks are names that have gained a large following because of activity on social media. Of course, meme stocks’ heyday was back in 2021, and most of the names that went on a tear thanks to their popularity on social media have subsequently crashed. Among these stocks are GameStop (NYSE:GME), AMC (NYSE:AMC) and Ocugen (NASDAQ:OCGN). These names imploded because they were drastically overvalued, while their social media boosters were far too optimistic about their outlooks. Although the meme-stock phenomenon has tremendously faded, there are still some hopeless names which are being regularly touted as being great investments on social media. Here are three meme stocks to sell immediately.
Trump Media & Technology Group (DJT)
The Trump Media & Technology Group (NASDAQ:DJT) is one of the most overvalued stocks that I’ve ever seen.
Despite featuring a huge market capitalization of $6.8 billion, the firm only generated measly revenue of $4.1 million last year. As a result, the shares have an impossibly stratospheric price/sales ratio of 1,210 times!
Even if former President Donald Trump does take office again and comes up with ways to generate, say, $100 million of annual revenue for the Trump Media & Technology Group, the shares will still have an out-of-this-world valuation.
What’s more, the Trump recently received $1.8 billion of DJT stock. Given his huge legal bills and the stock’s gigantic valuation, I’m sure that he will look to sell all or most of the shares. His sale of the stock, in turn, will put huge, downward pressure on the name.
GameStop (GME)
Prognosticators are justifiably losing patience with and hope in GameStop stock.
Two analysts issued reports on the name in the last 90 days. One of them has a “Sell” rating on the name and the other has a “Strong sell” rating on it. And on Seeking Alpha, five out of the six writers who have published columns on it in the last 90 days have either a “Sell” or a “Strong sell” rating on the shares.
Investment bank Wedbush recently predicted that the firm’s top line would sink by $150 million to $200 million every year. As a result, Wedbush expects the retailer to go bankrupt by 2029.
Indeed, the firm lost $257 million of cash in its quarter that ended in February, reducing its total cash hoard to $1.2 billion. If it continues to burn cash at that rate, it will run out of money in a little over a year.
In light of GameStop’s very poor outlook, it’s definitely one of the top meme stocks to sell.
Palantir Technologies (PLTR)
As recently noted by InvestorPlace columnist Jeremy Flint, Palantir (NASDAQ:PLTR) has indeed become a meme stock. However, Flint due to its profitability streak and moderate sales momentum, Flint reported it as “barely a meme stock.”
But as I’ve pointed out in the past, the firm has only marginal profitability. Indeed, last quarter its net income was just $93.4 million.
Moreover, it has a great deal of competition from many better-established companies, such as IBM (NYSE:IBM), Accenture (NYSE:ACN) and Booz-Allen Hamilton (NYSE:BAH). Like Palantir, they are also providing AI platforms and/or helping other firms integrate AI.
The shares have a huge forward price-earnings ratio of 67 times.
On the date of publication, Larry Ramer 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