Top 5 Worst Stocks Ever!
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Top Five worst stocks ever welcoming guys I am Jeremy This is the financial education channel in today we’re talking about top five worst stocks since I’ve been invested there are two requirements for today’s video one’s got to be stocked at since I started investing stocks that I saw and they were so overvalued and I saw the trend coming and I was just looking at him.
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I’m like this talk is so far overvalued guys so that’s the first one’s got to be in one stock so since I started investing I saw the other thing I did for this is I made sure they’re all popular well known companies all five of these stocks are they’re not some obscure stocks these are stocks.
That you guys probably know of and have heard of and whatnot and to achieve in today’s video is basically that you guys can spot trends in the future because a lot of these trends that these five stocks had a lot of stocks today have some of these trends Okay.
Or gonna have some of these trends in the future and you’re going to be looking into a company that’s got some of these exact same trends going on that these five stocks head and these all five of these stocks have fallen massively since they went up really high guys so hope you enjoy this day make sure after today’s video is over you click the very first link in the description that’s to join.
My exclusive private stock market membership group we were at 99 members you have a chance to be member 100 guys that is really cool. We’re about to hit 100 members on there that that group goes into all stocks on buying and selling in why stocks I’m looking at entry levels I’m looking at entry prices I’m looking at exit prices.
I’m looking at as well as also has a 12 part full part stock options course which every single investor out there needs to know stock options guys so make sure you join there after today’s video is over. Let’s get into this alright guys coming in at number five Coming in at number five is a very popular fast casual restaurant chain one of the hottest stocks going into 2014 it was one of the hottest restaurant stocks.
I’ve ever seen certainly in my time impossibly ever guys this was a company that was trading in the 10s of billions of dollars as far as the market cap when they were just growing and growing their burritos are massive and what is it to Portland Coming in at number five guys is ci pour les they’re worse this stock was set up for failure chipola was set up for failure here at number five guys the issue with chipolte.
Lee was was this was a restaurant chain okay a fast casual want to be Mexican you know restaurant chain but the hottest restaurant chain out there okay. And the issue was this company was so far overvalued as far as the P e ratios when for this company. This stock was priced to perfection. Okay, this stock was priced to perfection.
They had unreal, you know comp store sales ever growing them for six 810 percent comp store sales. They were amazing. revenues were exploding, profits were going up but they weren’t going up read at a ridiculous rate. Okay, if you really look at Chipotle as profits compared to the revenue, the revenue was actually much more impressive in the comp store sales were actually much more impressive than the bottom line.
That’s because they were expanding so fast or opening up a lot of restaurants and whatnot. All right. So this was such a hot chain and they had they had other businesses they were kind of possibly going into they had something called chop shop, which was kind of like a Chipotle a but for Asian food. Okay, so it looked like that could be maybe the next big thing maybe they could have some day 1000 of those types of restaurants right.
And it could be a massive Goliath company, kind of like a yum brands. But for a little higher quality food right? Yum brands By the way, they own chains like Taco Bell, Pizza Hut, KFC brands like that, so that they’re almost looked like AAA could be the next one of those just a little bit higher tier food.
You know, and this stock was set up price to perfection guys, the PE was astronomical in this company. And then what happened the whole E. coli situation happened. They had another norovirus or something going on there, it was thing after thing going wrong, which apparently in this stock was over $700.
In now this stock, you know, less than three years later, is trading somewhere around $275. Guys, this stock was over 700 bucks. Now it’s around the 270 $275 stock, she put layers. And it’s just it was up sock that was literally priced to perfection in the restaurant space.
Since that time, they had that disaster that happened in Tripoli, they’ve done in my opinion, a pretty good job as far as saving the whole company as far as not going under something like that they actually did a really great job as far as that went.
But they’ve also exit the chophouse business and, and they kind of have a few other businesses, they might try to get into a little pizza game, little burger game. But right now it just looks like Chipotle is just kind of the way they got to focus right now. And they’ve also cut down on the amount of restaurants they’re going to be opening now.
So it’s just bad news and bad news around Chipotle right now. And it’s just a stock that I saw that was just massively overpriced because of how many years it would take them to get that PE to a realistic range. It would have took them at least five to 10 years to get that PE to realistic range if that stock price stayed the same, because their net income was way lagging compared to where they are at guys.
And so you got to always be paranoid if that If you’re in a restaurant chain that’s got a p in let’s say the, the high you know 80s 90s or even the hundreds that AAA has at some point right in the hundreds you got to be prepared that man if something happens like that this stock could be you know, literally cut in half if not cut by 75% overnight guys and that’s pretty much what’s happened in Tripoli here.
That’s why it comes in. And number five does anybody remember a super popular game called Farmville? What about Mafia Wars? Well, in the late let’s say, 2007 2008 2009, maybe even in the 2010 if you are on Facebook, I can almost guarantee you you know about Farmville you may be played it, you know about Mafia Wars.
You may be played it, you know about those games, they were all over Facebook, and you get 1000 requests a day from people saying, hey, I need a cow or something like that on the Farmville game guys, it was blown up. It was raking in the revenue and the owner of that company. They went public around 2011. It was 2010 2011.
And their name was Zynga. Zynga and this was a stock that price of the IPO was somewhere around I believe it was $15. Right now, the stock trades in threes. All right, huge difference in the business. This is a stock that traded at a ridiculous valuation compared to the amount of money they were bringing in.
But it wasn’t just that, in this particular time when they were going public 2000 years, I think it was I said it was around I think 2011 they went public, right? That was a time when we were shifting more from PCs to mobile. And it was like, okay, how’s this gonna change things.
And Facebook was changing a lot at that time. And they were changing more to a mobile format. Because people were starting to buy a lot of smartphones, right? smartphones are starting to be used more and more. And this was totally changing the way people interact.
If we’re from Facebook, just being on a PC, and maybe playing a Farmville game on there to also now they were not okay. And so it was up to Zynga to come to change the business into a mobile format and try to get apps and whatnot. And they absolutely failed at that they absolutely failed.
They still to this day do not even have a big time game. In the app world. They lost that war to a company that came out of nowhere, which was Supercell they started a game called clash of clans. Then they started boom beach, they got several games Clash Royale, and they also lost to King digital, which took a ton of its female customers away by a game called Candy Crush, okay.
And several other games they had. But But Candy Crush was the main one. And so those type of companies ended up dominating the mobile apps. While Zynga which was kind of thought to be maybe they could be the future game leader out there. They were kind of forgotten about and that’s why the headstock still to this day is somewhere around a $3 stock they made so much money in IPO that it was literally billions of dollars.
They got an IPO that that has literally funded the business to this day, and they’re still able to stay afloat mainly because of all the proceeds they got from that huge IPO because when they went and did the IPO It was like the biggest game I believe it was the biggest gaming IPO ever in the history guys.
So that’s just a stock you got to watch out for that guys, when there’s a huge trend shift that’s happening there. You gotta wonder can this company change with the trend which was okay, we’re going from PCs and also Facebook’s can change in the way they’re doing things a little bit.
Now we’re going to add more apps dominated dominated world are they going to be able to you know, shift that way and some investors thought they could and they were wrong. Unfortunately some investors didn’t and they stayed away from Zynga guys and that’s why it comes in at number four man Apple’s a hard company to compete with this next one guys coming in here at number three.
This one is one of the main reasons this one has gone down so much and from where it was trading it is honestly because of Apple and Samsung and you know whenever apple or Samsung comes in your space I think you just have to pay attention to that guys they’re very hard companies to be specifically apple in which company am I talking about? I’m talking about Fit Bit guys.
We’re talking about Fitbit. This was a company that iPod it was somewhere around it was IPO in the 20s shot up within probably six months to a year after that it was was in the 50s right was in the 50s and this was just a couple years ago. Now the stock is about a $6 stock Okay, so went from $50 to $6 now in literally a couple of years time now what Fitbit had going wrong for it they actually never had a super astronomical the high p E.
Okay. It did have a high p as far as relative to the market but it wasn’t like oh my gosh is trading in the 1000s or the hundreds or something like that. Okay, so that actually wasn’t the issue. The issue with Fitbit came down to who was coming in their space okay, and who came in their space Apple A few years ago, Apple launched the Apple Watch.
Okay, that did many of the same things a Fitbit did, but also it did even more. Okay, and Apple Apple has the brand power that they can just when they really want to focus on something, it’s very hard to compete with them. And that’s the issue Fitbit had. And since then Fitbit sales have been declining.
Also, they’ve had to take a lot of trade offs at retailers and things like that, guys, so they they capitalize on the huge wearable trends. But now they’re kind of facing the brunt of all the big dogs wanting to come in and take some business out of that, which is Samsung, because Samsung has several different wearables.
And then Apple with how much Apple has focused on the Apple Watch of late guys. And I can honestly tell you, at least in my own personal life, I know way more people that were and actually have an Apple Watch and then they wear a Fitbit and some of them used to have fitbits but now they wear an Apple Watch full time guys.
So for that reason, Fitbit comes here at number three guys, they just had huge competitors come into their space, and it’s hard to compete with those guys, when you’re a smaller company. Oh boy, guys be ready to have your socks knocked off. Are you ready for stock? Number two? Well, here’s something for you. It’s the most talked about stock in this channel’s history. Okay.
Stock I have a big position in nowadays. Okay. Have you guessed what stock it is yet? Yes. You probably have guessed it go pro second worst stock I have ever seen in my time of investing. Okay. This stock IPO at around $24. Okay. Four months later, yes. Four months later, this stock was trading for $98 a share $98 a share. I remember they would talk about it.
Almost every day on CNBC. I have friends that were talking about and whatnot. And I was like, why this stock is trading at $98. Do anybody have any clue? Like what what’s going on with this business? At that time? GoPro had one one major product, they weren’t in the drone space. They weren’t in the virtual reality space. They didn’t have nearly as many accessories as they do nowadays.
They didn’t have a complete software solution. They basically sold action cameras, and this company was trading at 98 Yes, $98 a share. It did over well over triple almost quadrupled from where it IPO that guy’s quadrupled on real. And I was like, is this seriously going on? Is this seriously going on?
And it was and what investors I think got caught up in that we’re still buying up in those 70s 80s $90 range. And there was ton of buyers still, even in the 60s when it dropped back down. Right? What investors kind of were hopeful of is that they can maybe turn into a media company.
It’s a little harder to do than just, you know, going into a media company, right, especially when you’re a product focused company. And what happened with GoPro is they did not continue to innovate fast enough. And they went a whole Christmas in 2015 without launching a flagship product, which is an absolute no no in the electronics space.
You’ve got to launch a flagship product every single year. There’s a reason Apple comes out with new iPhones every single year. There’s a reason Samsung comes out with new Galaxy phones every single year. Does Apple ever go one year without releasing a new iPhone? Nope. Does the Samsung ever go one year without releasing a new iPhone? Nope.
Does DJI ever go one year without release a new drone No. GoPro went a full year without releasing a camera and that took sales way down in 2015 which the stock just crater got it down and now we’re at a stock that’s in the $9 range from $98 is one of the it’s literally the second worst stock.
I’ve ever seen as far as what were people thinking when they’re buying in at those those 60 7080 $90 God could you imagine the one that actually bought at the highs at $98? Like Like what were you thinking at that moment? It’s just it was a one trick pony. And and I don’t know what people were hopeful of, but it was honestly it’s one of the worst stocks.
I’ve ever seen in my time and I probably won’t see there are many stocks that bad ever again. Alright guys, the time has come for me to reveal the number one worst stock I have ever seen in my time number one worst stock. This was the stock I held at one point.
I held this stock I bought it originally it was somewhere around the $8 range. Okay, I held it for roughly a year never made any money out of it sold out of the position. Okay. Over the next year and a half that stock went from around an $8 stock where I sold out I’d never made any money unfortunately, in a year and a half time it went up to $43 a share $43 a share guys first off I was it’s probably the worst sell.
I’ve ever made because of how much money I could have made in that bond. Right? This stock Okay, is now a $5 stock. This is now a $5 stock It was $43 I believe was 2013. Okay, and that stock is pan Dora Pandora, the radio music app that I actually still use this day every once in a while. I’m sure a lot of you guys probably use Pandora out there, right?
Pandora oh my gosh, like I cannot believe this was trading at $43 a share in 2013 because what you could have seen at that time was When Spotify was getting more and more popularity, it was clear that streaming was kind of going to be the future, okay. And Apple, there was a lot of rumors about Apple was going to be entering the space probably within the next year or two, which eventually they ended up doing okay.
And there was rumors that a lot of other places were going to start up streaming services, which titled it anyway, all these money, this influx of money coming into a space that was crowding out Pandora, a lot of people that were Pandora users, like myself actually ended up going on to one of these streaming services, and then use Pandora far in far less Okay, which is what ended up happening to me.
I’m an Apple Music user now, and I hardly ever use Pandora, it’s pretty rare. I probably use Pandora for maybe one hour a week or two hours a week, when it used to use it for literally probably 15 to 20 hours a week of listening time. That’s a dramatic drop off in the amount of ads. And that happened to for Pandora as a company.
But that’s not just the biggest thing that Pandora had. The biggest thing is has to do with actually music royalty rates, okay? So every four years, these rates are that that Pandora has to pay per song played right, they generally go up and up, depending on how Pandora is business is going. So these rates are going to just keep going up as Pandora brings in more money, which then makes Pandora in a situation where it’s like they can never make a profit.
And if they can never make a profit there and they keep taking losses, they’re gonna eventually go out of business guys. And now we see Pandora down here as a $5 stock. And it’s like, what is the future of Pandora, the future of Pandora, I’m not, I’m not 100% sure if they can even.
I’m not even I wouldn’t even say I’m not even 50% sure if they’ll even be around a few years from now, unless they get bought out by another company because of the type of losses they need to take. And I don’t know if I can ever see them making a profit with all the big dogs like Spotify, and specifically Apple Music.
Okay, and you got Google doing their thing in the music game with YouTube and YouTube read and a lot of different things Google’s go doing with music, it’s hard for me to see a future for Pandora out there unless they get acquired by somebody that can put the money into Pandora that can say okay, we’ll take losses for the next 510 years.
And then we’ll start getting gains after that. I’m not sure that can be there. So we’re seeing Pandora at a $43 stock was just mind blowing to me because it was really at that time, you could really start seeing that there’s all this stuff coming back when I was invested in it. It was such a low price stock at $8 a share.
And it wasn’t clear if streaming was the future at that time. By the next year and a half It was kind of clear that streaming was going to be the future in Pandora might not be the future of the streaming it might actually be Apple Music and Spotify and some of these other guys which is how it played out. Hope you guys enjoyed this video so much today.
I hope this helps you guys out immensely. As far as seeing the trends in the future. Don’t forget click that first link in the description you have a chance to the member 100 over there guys in the exclusive group. I would love to have you there. Thank you for watching guys and have a great day.