7 Nasdaq stocks to sell before they die
As is typical of a bear market, the Nasdaq dragged down the other major indexes over the past year. The tech-hevy index is down 28% in the past 12 months, compared to a 17% decline in the S&P500. There are bargains to be found amid the tech wreckage to be sure. But there are also plenty of poorly performing stocks that are likely heading much lower, perhaps even $0. These are the names you will find on the current list of Nasdaq stocks for sale.
Most actions are already prices deep into penny stock territory. Still, that doesn’t mean investors should continue to hang on. There are many signs pointing to a continuation of the stock sell-off. Stocks tumbled after the Federal Reserve’s latest 0.75 basis point rate hike. Calls for recession abound, such as that of fedex (NYSE:FDX) CEO Raj Subramaniam.
Weaker stocks will continue to be the hardest hit. Therefore, if you own any of the Nasdaq stocks listed below, consider selling them immediately.
|CLOV||Clover Health Investments||$1.99|
Beyond Meat (BYND)
Beyond meat (NASDAQ:BYND) is somewhat unique on the current list of Nasdaq stocks for sale, as it is the only one that is not yet a penny stock. But it could be soon.
My concern for the company is the same as it always has been: plant-based meat just doesn’t taste very good. Why would consumers who want high-protein, animal-free foods choose plant-based meat over vegetables, which taste good on their own?
My personal opinions aside, Beyond Meat has some serious issues. First and foremost, its weak fundamentals. Revenue growth has slowed significantly in recent years. And the company posted a net loss of $197.6 million for the first half of this year. That’s much worse than the $46.9 million net loss in the first half of 2021.
Then there are the weird titles. Beyond Meat COO Doug Ramsey was arrested earlier this month for allegedly biting off a man’s nose in a fight. Ramsey has since been suspended, but it’s not a good look for the company.
BYND stock may not be in immediate danger of falling to $0. However, it is very likely that it will continue to decline and investors should avoid it.
Clover Health Investments (CLOV)
Clover Health Investments (NASDAQ:CLOV) is one of several SPAC companies in Chamath Palihapitiya that went public and has since faltered.
It’s a prime example of what can go wrong when loose market conditions lead to overzealous speculation. Palihapitiya last year extolled the virtues of the SPAC investment mechanism. He then said that a SPAC “actually allows you to raise a very large amount of money, to go to a broad base of institutional investors, and it allows you to tell them what you think the future may look like”.
This message was better received by the market under the looser quantitative policies that persisted through the end of 2021.
Clover Health’s SPAC deal was announced in October 2020, valuing the insurtech at $3.7 billion. After an initial surge, investors suffered heavy losses. Some of those investors are suing the company, alleging they were misled by its executives and Palihapitiya in the lead up to Clover’s IPO.
The company’s net loss narrowed in the second quarter year-over-year, but remained at $104.2 million. His lack of revenue combined with the other issues I mentioned are a recipe for more sales.
Aurore Innovation (AUR)
Aurora Innovation (NASDAQ:AUR) provides standalone hardware, software and services. At the height of the tech boom, investors couldn’t get enough of companies like this. But as the reality of a rising interest rate environment set in, AUR stock lost its luster.
Shares fell off a cliff in early 2022, falling from above $11 to below $5 in January. Today, the stock is closer to $2 per share than $5.
The company’s poor fundamentals are cause for concern and could lead to stocks falling below $2 or worse. For the second quarter, the The company reported revenue of just $20.7 million, all of which was collaboration revenue. And it posted a net loss of $1.2 billion for the quarter. That was much worse than the previous year’s net loss of $181.8 million. Ending the quarter with just $549.4 million in cash, Aurora Innovation is truly on the brink.
I confess that I sang from Matterport (NASDAQ:MTTR) praised not so long ago. The company is focused on digitizing and indexing the physical world through 3D technology. In short, it works to replicate the real world as 3D models.
When the metaverse pandemonium was at its height, investors flocked to MTTR stock, believing its technology would soon see a massive spike in demand. Unfortunately, the numbers tell a different story.
In the second quarter, Matterport saw revenue decline 3.5% year over year to $28.5 million. First-half sales increased by only 1%. Hardly the growth story investors were hoping for. Meanwhile, losses increased sharply to $64.6 million in the second quarter from a net loss of $6.19 million in the second quarter of 2021.
It’s hard to see how Matterport can continue to do business for long under the current circumstances, let alone justify a bullish case for its actions.
Scientific Core (CORZ)
VSscientific ore (NASDAQ:CORZ) provides blockchain infrastructure, digital asset self-mining operations, hosting, and blockchain technology.
Don’t be fooled by some of the flashiest metrics touted by the company. Yes, its self-mining Bitcoin (BTC-USD) operations saw a 1,769% increase in production in the second quarter, reaching 3,365 Bitcoin mined. That helped revenue more than double year-over-year to $164 million.
However, Core Scientific posted a net loss of $810.5 million for the second quarter. This was largely due to a $790.8 million impairment of goodwill and other intangible assets. But the company only had $128.5 million in cash at the end of the second quarter. That’s not much of a cushion given investors’ aversion to nonprofits and the ongoing crypto winter.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN) saw its shares tumble as electric vehicle stocks fell dramatically out of favor. MULN stock hit a high just below $16 in November 2021. Not even a year later, it’s trading below 35 cents.
The California-based company says it offers an end-to-end ecosystem for electric vehicle ownership. That’s a big claim for a company that has yet to launch a vehicle.
The company recently released preliminary third-quarter results that told investors essentially nothing. Does Mullen plan to focus on delivering the 600 vans to Amazon (NASDAQ:AMZN) DelPack Logistics partner that it has committed to deliver over 18 months in a binding agreement? Or is the company more focused on its majority stake in Bollinger Engines?
Either way, it’s hard to see how Mullen can pull it off. It’s very late for the already crowded EV race. The strong sale of its shares put it in danger of being delisted from the Nasdaq. A last-minute offer to buy the assets of a bankrupt competitor Last mile electrical solutions (OTC:ELMSQ) is not likely to be a game-changer.
CohBar (NASDAQ:CWBR) is a biotech looking for ways to commercialize mitochondrial peptides in the fight against age-related diseases. So far, this search has been unsuccessful, with the company remaining in the pre-revenue stage. As the company continues to lose money, it is rapidly approaching a liquidity crisis.
CohBar lost $2.7 million in the second quarter. Of course, losses are commonplace for biotech companies. The problem is that CohBar reported less than $2.9 million in liquid reserves at the end of the quarter. If it replicates its performance from Q2 to Q3, it will be cash short or close to it. If it does worse, it will have to get creative to get funding.
On September 22, the company announced a 1-for-30 stock consolidation, the maximum of the range approved by shareholders following the June 15 annual meeting. Reverse stock splits are never a good sign, especially when done to avoid getting delisted from the Nasdaq.
At the date of publication, Alex Sirois did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.