September 13, 2025
Every successful investor knows a painful truth: knowing when to sell is often more critical than knowing what to buy.
While financial media overwhelmingly focuses on buying opportunities, our research consistently identifies companies facing significant headwinds that merit serious consideration for selling. These aren’t just stocks underperforming the market; they’re businesses confronting structural challenges, deteriorating fundamentals, or carrying valuations disconnected from financial reality.
What you won’t find here: reactionary calls based on short-term price movements or headline volatility. Each company on this list has been thoroughly analyzed across multiple metrics that historically precede substantial declines.
Smart investors understand that portfolio management requires both addition and subtraction. Sometimes the best investment decision is to redeploy capital away from troubling positions before problems fully materialize in the share price.
This week’s watchlist highlights stocks showing critical weaknesses that demand immediate attention:
Lucid Group (LCID)
Lucid Group’s reverse stock split implementation serves as a red flag masking the company’s fundamental failure to achieve sustainable manufacturing scale despite years of operation and substantial capital investment. While the 1-for-10 split artificially inflated the share price from around $2 to approximately $19, it cannot address the underlying production challenges that forced management to cut full-year production guidance to 18,000-20,000 units from the previous 20,000 target. This reduction is particularly concerning given that the company originally targeted 20,000 deliveries in 2022 and has consistently failed to meet production milestones since then.
The financial metrics reveal a company burning cash at an unsustainable rate with no clear path to profitability. Despite a 30% revenue increase in Q2, net losses expanded 8% year-over-year, demonstrating the company’s inability to leverage increased sales into improved operational efficiency. The catastrophic gross margin of -99.26% indicates Lucid loses nearly a full dollar on manufacturing costs for every dollar of revenue generated, a fundamental breakdown in unit economics that suggests profound operational inefficiencies extending beyond normal scaling challenges.
While recent developments including the $300 million Uber partnership for 20,000+ Gravity SUVs and European market expansion appear positive, these agreements are contingent on Lucid’s ability to solve manufacturing problems that have persisted for years. At a $6 billion market capitalization despite producing fewer than 3,500 vehicles quarterly, Lucid trades on speculative hope rather than operational reality. The combination of persistent production shortfalls, negative unit economics, and dependence on external partnerships for validation creates a precarious investment situation where even positive business developments cannot overcome fundamental execution failures that show no signs of resolution.
Rubrik (RBRK)
Rubrik demonstrates how exceptional operational performance can trigger significant selling when forward guidance fails to justify premium valuations in growth-sensitive technology markets. Despite posting impressive second-quarter beats with adjusted losses of just $0.03 per share versus expectations and revenue of $309.86 million exceeding estimates by $27.6 million, the stock plummeted following management’s conservative third-quarter guidance. The 18.1% decline reflects investor disappointment that robust margins and strong execution cannot support the company’s demanding valuation multiple of approximately 12.8 times expected annual sales.
The fundamental challenge facing Rubrik lies in the gap between investor expectations and management’s willingness to provide aggressive growth projections in the data security market. While the company achieved impressive 51.2% year-over-year revenue growth with a strong 77.96% gross margin, third-quarter guidance suggesting losses between $0.16-$0.18 per share disappointed investors expecting faster progress toward profitability. This guidance conservatism, while potentially prudent from an operational standpoint, conflicts with the premium multiples investors have been willing to pay for high-growth cybersecurity plays.
At $73.96 following the significant decline, Rubrik continues trading at substantial multiples that require sustained execution excellence and consistent guidance raises to maintain investor confidence. The elevated trading volume indicates institutional reassessment of risk-reward profiles when growth companies provide conservative outlooks during market periods favoring momentum narratives. For investors seeking cybersecurity exposure, Rubrik’s combination of strong fundamentals and demanding valuation expectations creates a situation where even solid operational performance may not prevent continued volatility if management cannot consistently exceed increasingly optimistic market projections.
New Fortress Energy (NFE)
New Fortress Energy faces potential bankruptcy as the LNG infrastructure company confronts a perfect storm of massive losses, declining revenue, and overwhelming debt obligations that management appears unable to resolve through normal operations. The company’s devastating second-quarter results revealed a net loss of $556.8 million, expanding dramatically from the previous year’s $86.9 million deficit, while revenue declined 29.5% year-over-year to $301.7 million. The $699 million in non-cash impairments suggests systematic overvaluation of assets and goodwill that may require additional write-downs in future periods.
Most concerning is management’s announcement of strategic alternative reviews, which typically signals distressed situations where normal operational turnaround strategies have been exhausted. The company’s large debt load combined with weak cash flow generation creates a liquidity crisis that asset sales alone cannot resolve, as evidenced by the recent Jamaica business divestiture. The market capitalization of just $387 million relative to the scale of recent losses suggests investors are pricing in significant dilution or restructuring scenarios that could largely eliminate current equity value.
At $1.33 per share, approaching the 52-week low of $1.26, New Fortress trades like a distressed situation where potential bankruptcy restructuring could wipe out existing shareholders. The 24.81% gross margin provides insufficient operational leverage to overcome the magnitude of recent losses and impairments, while management’s promises of improved performance in Brazil and Nicaragua appear increasingly hollow given the persistent execution failures. For investors still holding positions, the combination of strategic review announcements, expanding losses, and debt service challenges creates a scenario where immediate exit may be prudent before potential bankruptcy proceedings crystallize the substantial risks facing equity holders.
