Unless you’re shorting a stock, it’s never good when it falls into dangerous territory. There’s a big difference between a short-term dip while a stock gathers momentum and the sad fate of dead-end stocks.
The executives (and the investors) in the companies on this list had high hopes at one point. Many of these names were great stocks to own, and at the forefront of emerging industries that were sure to strike it big.
But the stock market is a fickle place. There’s no such thing as a sure thing. Who would have expected five years ago that we would be in year two of a war in Ukraine or that a global pandemic would change how we think and live?
Few would have expected the run-up in lithium, the roller coaster of cryptocurrencies or the breathtaking advances in artificial intelligence.
While you can’t guarantee success in the stock market, tools like the Portfolio Grader give you an advantage. The Portfolio Grader evaluates stocks on various measures, including sentiment, momentum, earnings performance and other factors.
Just like school, you want to avoid the “D” and “F” grades on your report card.
These seven stocks are suffering. If you own these dead-end stocks, you’ll want to consider a change before they drop even further.
Rivian Automotive (RIVN)
One of those high hopes in the race to mainstream electric vehicles was Rivian Automotive (NASDAQ:RIVN). The company, founded in 2019, manufactures the R1T pickup truck and the R1S SUV.
The company had the sixth-biggest initial public offering in U.S. history, opening at $78 per share and seeing its stock price jump to nearly $180. Its market value climbed to more than $100 billion.
But now? Rivian is at less than $16, and its market value dropped to less than $15 billion. Scaling production continues to be slow. For the first quarter of the year, Rivian only manufactured 9,395 vehicles and delivered less than 8,000.
The company made $661 million in the first quarter but posted a loss of $1.35 billion, or $1.25 per share.
Competition in the EV space from bigger and more-established automakers gives Rivian a weak outlook. And they’re not the only EV company facing this problem, as we’ll explore later.
RIVN stock has a “D” rating in the Portfolio Grader.
Mullen Automotive (MULN)
Rivian’s in terrible shape but looks pretty healthy compared to Mullen Automotive (NASDAQ:MULN) stock. Speculators may take a chance with Mullen, but you can count me out.
Mullen is trying to stay in the business of producing and selling commercial EVs. It says it’s on the verge of a “liftoff moment” and is continuously churning out press releases announcing partnerships and deals to help bring its EVs to market.
The market’s not buying. MULN stock is down to 16 cents per share, a drop of nearly 98% this year.
We expect shareholders to vote on a reverse stock split scheme in August to salvage the price and keep the stock in compliance with Nasdaq rules. The initial proposal called for approval of a split between 1-for-2 and 1-for-10, but now Mullen is suggesting the split could be as much as 1-for-100.
Keep in mind that Mullen already did a 1-for-25 stock split in May. So if it did a 1-for-100 reverse split, it would have a cumulative stock split ratio of 1-for-250.
Is it worth it? Not a chance. MULN stock has an “F” rating in the Portfolio Grader.
Nio (NIO)
Awful EV stocks aren’t just in the U.S. Nio (NASDAQ:NIO), the Chinese EV company once believed to be a strong EV competitor, is undoubtedly down on its luck.
Nio was down 24% on the year just a couple of weeks ago until a surge got it within 5% of its Jan. 1 price. But does Nio have anything left in reserve? I don’t think so.
The company’s production numbers are going in the wrong direction. It produced 10,378 vehicles in March but only 6,658 in April and 6,155 in May. Just as troubling, the company’s making less per vehicle, with a margin of only 5.1% in the first quarter. A year ago, the margin was 18.1%.
Nio will try to turn the corner by implementing price cuts and ending its free battery swap promotion. Nio has always stood out with its battery-swapping technology – rather than charging a depleted battery, Nio customers exchange it for a new one. But by ending this free service, Nio gets less interesting for customers.
Nio has a “D” rating in the Portfolio Grader.
Polestar Automotive Holding UK (PSNY)
Based in Sweden, Polestar Automotive (NASDAQ:PSNY) went public a year ago in a special purpose acquisition company (SPAC) deal.
Since that $10 opening, Polestar never made it past $14 per share – but it’s dropped much further. Shares trade today for less than $4 per share, meaning PSNY stock’s given up 61% of its value since hitting the market.
Volvo bought the Polestar brand in 2015 before spinning the division off, so its vehicles have a Volvo influence. It still owns over 50% of the company.
The company delivered 12,000 vehicles in the first quarter but cut its projected delivery target for the year because of delays in the Polestar 3 electric SUV. Analysts projected it to deliver 80,000 this year, but now it’s expecting global deliverers of between 60,000 and 70,000.
Polestar is trying to double down on the China market, announcing a joint venture with Chinese technology company Xingji Meizu Group to accelerate its growth in Asia.
But I’m not sold on the long-term effort to compete in China. PSNY stock has a “D” rating in the Portfolio Grader.
Intel (INTC)
Intel (NYSE:INTC) used to be a high-flying computer company. And it still has plenty of power and name recognition, but the company is losing market share, making me question if it’s about to lose its leading position in the global data center market.
Intel’s market share dropped from 80.7% at the end of 2021 to 70.7% by the end of 2022. Meanwhile, up-and-comer Advanced Micro Devices (NASDAQ:AMD) grew its market share from 11.7% to 19.8%. AMD also recorded a 62% gain in data center revenue, while Intel dropped 16%.
Intel is trying to retrench. It’s committed to $50 billion in new spending – encouraged by government incentives – in Poland, Germany and Israel. But it will have to find a way, even during the construction phase, to increase revenue, which dropped 36% in the first quarter.
INTC stock has a “D” rating in the Portfolio Grader.
Lucid Group (LCID)
Let’s throw one more dead-end EV stock on the bonfire before we set it on fire. Lucid Group (NASDAQ:LCID) has been a significant disappointment.
Lucid stock is down 30% from late January, trading at less than $7 per share. That’s down 85% from its all-time high set in late 2021. It sells the high-priced Lucid Air (the starting price is $87,400), but it’s not catching on with consumers. Lucid delivered 1,406 vehicles in the first quarter.
The company’s losing money hand over fist with those paltry production numbers. In the first quarter, revenue was $149.43 million, but the net loss was nearly $780 million, or 43 cents per share.
The company is trying to shore up its cash position by announcing a sale of 173 million shares, further diluting shareholders’ positions.
Lucid is hoping that an expansion to China will help matters. I’m not optimistic. China already has plenty of EV companies vying for attention, including Nio.
LCID stock has a “D” rating in the Portfolio Grader.
QuantumScape (QS)
QuantumScape (NYSE:QS) isn’t an EV manufacturer. But it’s still heavily involved in the space, making some of the batteries that make EVs roll. Its vision is a “forever battery” that works better than conventional EV batteries because it lasts longer and charges faster.
But it’s still unknown if QuantumScape can bring the idea to the mass market and start making money with its battery concept. The company’s spent more than $500 million on development, but there’s very little information in the public sphere about its progress.
It’s understandably hard for investors to get too excited when the company’s not making an interesting case that it’s progressing. QS stock is down more than 17% since February, and it seems closer to a dead end than a new beginning.
QS stock has a “D” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
