Stocks I Sold That Went Down More Than 50%
Occasionally, you will be holding stocks that you should sell. It is not always going to work out when you sell. I've also sold 5 stocks that went up >50%. Most times, you should hold. But this only works when the business is executing its plan and reaping profits. In some of these trades, I got out at a profit before the stock moved down. In others, I took a loss to move on from a bad decision, and then the stock continued to lose more than half its value.
- DNUT, -51%
I entered Krispy Kreme Donuts for a short term trade to medium term investment. This was an ill-fated move. I instantly became a bagholder from $13, bought the dip a few times under $10. After seeing my questionable pick, I sold half of my shares early in the trade at a loss at $10.45, a good move in hindsight. Still, I bought the dip when the price dipped below $9. After 3 quarters of following the earnings reports, the donuts started to smell a little funky to me. Add in that the brand is not owned by its original owners, but a venture capital firm who bought them privately to then return to flounder in public markets. The business isn't as hot and fresh as its donuts. They failed to turn a profit in this most recent quarter and the past 2 reports stunk it up. Management put a lot of its chips in the McDonalds partnership growth lever, which seems to have fizzled out. My losses were sizable, but thankfully I had the sense to get out at $6 before this tumbled below $3. In total, this little maneuver cost me $1,382. I would be in worse shape holding my Krispy Kreme bags today, given the state of the company and diving stock price.
- TDC, -51.5%
This company was a short-term trade of which I knew so little about the company, Teradata. Traded a small $100-$150 position and closed at a small profit. Really not sure why I messed with this stock. It was a good move to kick it out of my portfolio, seeing it has lost half its value looking back to when I traded it.
- UA, -58%
Under Armor was one of my first stock picks. It was a terrible pick. I was only invested in the stock for 4 months. I felt the general sentiment was awful around their earnings reports. 2017 was a difficult year for the company. I sold out of my 30 shares in 2017 above $14 at a -22% loss. I couldn't justify choosing this company over Nike and didn't have much conviction due to negative operating sentiment. Suffice to say it's been a rough decade for athletic wear stocks. Looking back, with more patience I could have waited a few years to sell at breakeven or a small profit. However, checking back 8 years later, the stock is worth $6. Staying long UA from 2017 would have been a negative ROI, with more than half the investment value lost.
- LYFT, -64%
I wrote in an earlier post on this blog about my wise move to exit at $35-$55. The price currently sits at $16. In their case, it didn't pay to be number 2 in the rideshare industry. More competition ramps up soon with Waymo delivering 250K rides and Tesla beginning its rollout in June. I closed out my Lyft position for a $600+ loss. Similar to Krispy Kreme, I took the losses to lower my taxable income. In both stocks, I would be sitting on much larger losses if I kept my shares.
- API, -69%
In the boom times of 2021, I impulsively bought the dip on the company that made Clubhouse. I bought Agora stock during Clubhouse's 15 minutes of fame moment after the pandemic. Remember Clubhouse? It's an audio service that offered live community chat audio rooms. It was not a good stock to hold since 2021. Fortunately, I kept my losses limited to $194, so it's not as deep a flesh wound as some other stocks have made. The stock has been sliding downhill ever since I got in above $90 and added on further drops. In the end, I tax harvested the losses and sold out at an average of $7. The current price is $3.59 so this beaten down stock did have room to fall even more. It was an odd bet to make that I didn't really think through. China exposure adds more risk here also. I think the lesson from this trade is that when a stock is having a moment of ultra hype and fame, don't get caught up in the flurry too much. I believe that is what happened to me when Clubhouse was having its moment. I also, being a developer, was attracted to the ticker "API". I thought I saw something disruptive happening in the audio space. The better audio investment choice would have been to add to my Spotify position. Fortunately, I don't often treat the stock market like a casino, and when I do, I typically don't bet a lot.
- CGC, -76%
I wanted to invest in the marijuana boom, and Canopy Growth was one of the best known options to play the trend 5 years ago. This trade is runner-up for my worst investment outcome. The business is run like it's management's own personal credit card account. They're nowhere near profitable, and no signs of a turnaround. I rode this stock down too far and made the mistake of adding when it tanked. In the end, it was a $1,052 mistake that cost me most of my investment after holding for 3 years. The silver lining is that I did sell at a local high exiting at $7 before it dropped another 76% to below $2. I was so sick of this company by the time I sold, I felt a huge relief to no longer be holding. Good riddance.
- MTCH, -81%
I entered Match Group thinking it must be a high-margin business. It holds my personal record for the shortest time I've ever held an investment at 1 month and 3 days from open to close. Tinder, Hinge, Match.com and OKCupid are pinnacles of single dating life. Match Group has the market cornered it seems. However, I had no conviction in the idea nor the interest to understand the economics of dating apps. Then consider the fact that a dating app that does its job, connecting 2 people to start a relationship, causes Match to lose 2 users everytime it succeeds. In retrospect, it was the right move to move on from being a dating app investor. I sold my 3 shares at an average of $158 to cash in $5 of profits before the bottom fell out of this stock. It now trades around $29. Sometimes the best wins are the shots you don't take.
- EB, -89%
Eventbright was a well-known startup in the ZIRP era. They pop up occasionally in ticketing for events I attend. I only owned 1 share, which I bought and sold above $20 for a tidy $0.67 profit. The pandemic was a huge setback to their business and the stock reflects that thesis today. The market price as of today hovers around $2.
- BYND, -97.5%
Beyond Meat rode a wave that turned out to be more of a fad. Veggie meat pops up occasionally at the restaurant. There are other products in this category, but it seems the demand for this type of food was overestimated. The position was small, 7 shares. Thankfully I didn't hang onto this one. I closed out the position at a $114 average for a $138 profit. I sold because it was low conviction to believe in the fake meat industry. Today it is priced under $3, so I made the right call to get out.
- BRDS, -100%
It's not often you will sell a stock and it actually ends up going to zero. I now can now tell the story of accomplishing this rare feat and have a little chuckle about the disaster. Foolishly, I was playing a trade for a bounce in a scooter company. This is my dumbest trade/investment idea ever. I simply didn't know what I was investing in. I saw some "merger" news that sounded bullish for them to become the largest scooter company in the USA via an acquisition of the scooter startup "Spin". "Why not own the #1 scooter rideshare company?", I thought. I had seen both Bird and Spin operating in cities like Denver and St. Louis. So I threw $200 in on a whim. The "news" (stock pump piece) of them becoming the #1 biggest scooter company in America was actually a precursor to "restructuring" and bankruptcy. I ignored the warning messaged from my broker not to buy the shares and bought in, looking for a comeback story. Bad news hit days after I bought shares. The company was delisted from the New York Stock Exchange for having too small of a market cap. The ticker moved to over the counter (OTC) exchange and the ticker was later changed from BRDS to BRDSQ. I averaged down on my shares on the OTC, hoping to break even.
"We firmly believe that BRDS current market cap does not reflect the intrinsic value of the Company," Michael Washinushi, Bird's interim CEO, was quoted as saying in the statement on Friday. "And while disappointing, this change in our listing status on the NYSE does not alter our commitment to our shareholders, our valued employees across Bird and Spin, our partners and the many global cities and institutions with which we work."
/- CNBC, https://www.cnbc.com/2023/09/22/scooter-company-bird-delisted-from-nyse-will-trade-over-the-counter
The message from the business was that they were staying the course, rebuilding with the Spin acquisition, and "committed to our shareholders". It turned out the acquisition was a facade to hide Bird's rotten core. After getting some skin in the game, I was eyeing the upcoming earnings call to learn more about what was going on with this mysterious business. Little did I know, the executives had no intention to host the call. When they made a surprise late night blog post announcement to "restructure" assets and reconcile with creditors, I set my sell order. I didn't want to be left holding the empty bag. Thankfully I had subscribed to the company website via RSS feed so I immediately saw the news. My final trade executed at open at $0.26 to sell 500 shares I had bought anticipating a recovery. After I sold it all, that day it plunged to below $0.10. I managed to get out at a -79% loss, losing $490. It was small bet that resulted in stunningly huge % short term losses in only 3 months from open to close of the trade. I deserved it for not doing my homework.
By selling at open the day after the bankruptcy news broke, I avoided the fall to zero and walked away with $129. Bird Global is no longer a publicly traded company, and no value was returned to shareholders due to all assets absorbed in repaying the scooter company's creditors. I still see their scooters in operation occasionally when I visit random cities. They have likely been absorbed by other scooter companies if they are still running or are still operating some places. The website still is live. If you search Bird scooters in the news, you'll see various cities are still kicking them out of town to this day. It's a constant reminder to me that good stocks will work for you and the worst stocks actually take from you.