We’ve all been hearing it with these hype stocks. “This stock is the next Tesla!” “We can beat Wall street with this stock!” “This stock will give you 10x gains!”
But the question remains, do these stocks acually do what the media says they will?
I’ll be going over 5 of the last “hype” stocks the media has pumped out over the last 6-12 months. The results are something that does not shock me, but will shock you.
1. Virgin Galactic ($SPCE)
Virgin Galactic was one of the lesser known pumped up stocks. Being one of the first to be on Reddit. But it for sure had a strong media presence, especially for the tik-tok community.
Virgin Galactic is a company that plans to create space tourism by 2022. Their business plan is to fly people and researchers into space for tourism and leisure purposes. Something that has never been done before, for good reason.
Truth is, right now they have no revenue which means no profit, no test flights, just speculation. The company’s balance sheet is just one big number of debt. They are fundamentally a bad stock.
Will they be a success? Maybe. Are you going to risk a lot of money into a highly speculative stock? I know I’m not. Take a look at their 1 year chart.
Look at where they are now. Yup, near all time lows. No matter where you bought in, youre down a lot.
2. AMC ($AMC)
AMC is an entertainment business. Their main source of income is from their movie theatres. In which they are the largest movie theatre chain in America. We all remember the AMC and Gamestop hype from Reddit. How it was the hedge fund shorters vs. the public. Ultimately, the hedge funds won.
But where is AMC at right now? They are a HEAVILY day traded stock which is what moves their price so much. Almost no big investers or institutions are buying this stock. Which should tell you the smarter indiviuals of the world do not like this company. Lets be honest here the movie theatre chain is dying out, especially because of the pandemic. This is not a great long-term stock compared to all the other stocks you could be buying.
Although the chart does say they are trending upward, I think it’s because of the day traders. Stock could fall to $5 tomorrow, no one knows.
3. Nikola Motors ($NKLA)
Nikola is claimed to be the next Tesla. They provide a zero emission vehicle using hydrogen and electric variants. The only problem is, they have not started production and won’t start for a very long time… 2023 is when they plan to start production!!
This one is similar to Virgin galactic. A great idea on paper, but no proof yet to back it up. The stock price is solely based off speculative decisions by retail investers. Again, their balance sheet is just a fat number titled… DEBT.
Look at the stock chart, its just awful to look at. No matter were you bought at, I bet you’re down money right now.
4. Lucid Motors ($CCIV)
This one is actually the most legit out of all the other hype picks. Lucid is another elctric vehicle company. They are currently in production of their cars right now, aiming to make about 7,000 this year. They have a clear business plan of being a high-end electric sports car brand.
Churchill Capital ($CCIV) is a SPAC acquiring Lucid Motors (Special Purpose Acquisition Company). SPAC’s take on less debt than traditional IPO’s because all their capital raised through the stock, not typical private equity lending. Which is great for this time of inflation because less debt, means less exposure to inflation.
This stock is still high risk-high reward because they don’t have any revenue and have not tested the market yet. If I were to choose one stock that I’m talking about today, it would be this one. But please don’t put a large sum of money into this, the odds are against you.
5. Gamestop ($GME)
A stock that needs no introduction. Everyone knows about this one so I’ll keep it short. My concern with gamestop is I think they’re the next blockbuster. Everything they sell can either be bought online for the same, or cheaper price. There is no need to go into gamestop anymore, it’s too much of a hassle for people. Also, their online store is just as much of a ghosttown as their retail store.
The stock price is just influenced by day traders now. It has no correlation to the fundamentals of the company at all. It’s the same exact thing as a casino right now.
At the present price , maybe you made some money. But a lot of people felt the burn on this.
My Thoughts You Must Know
More often than not these hype picks you see on your socials are the equivalent to walking into a casino and throwing everything on black. Might even be worse, because if you do make money you seem like a genius since it’s the stock market. And now you do it again on the next stock, but lose this time.
People just want to drive the price up, then pull out when they make a profit. They don’t care whether you make make one or not. Sure, maybe you made some money off these stocks. But just know it’s not sustainable down the line. Don’t throw all your money away into these stocks when it could be used to buy legit long-term assets.
If you really want to put money into fundamentally awful companies, the stock market is not for you. I won’t even say put a small amount of meaningless money into them for fun. Because then you hate yourself for not putting more in if you do go up. Know who is recommending these stocks and do your own research. It pays in the long run.
The Common Trader 
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