Ranking the 5 worst Nasdaq Stocks
This analysis focuses on ranking the 5 worst currently trading Nasdaq stocks. I use three simple criteria to rank them: 1) difference between all-time highs and lows; 2) cumulative reverse splits; and 3) what percent the stock has to go up to reach its all-time high.
Worst Stock Rank #1
Based on the above criteria, DryShips (NASDAQ:DRYS) is the worst-ranking stock currently trading on Nasdaq. Based in Greece, DryShips is a global shipping transportation company specializing in the transportation of dry bulk cargoes. As a foreign company, it enjoys limited SEC filings compared to domestic companies. Sifnos, the private company of DryShips CEO George Economu, owns more than 90% of DRYs' debt ($200 million). On September 09, 2016, the CEO gained massive voting rights by converting Sifnos' $8.75 million debt into 29,166 shares of Series D preferred stock ( Series D preferred stock has voting rights, 100,000 votes per share). After the reverse splits of 1-for-4 & 1-for-7, the CEO currently has 104 million voting rights, versus 26 million voting rights for common shareholders. What this tells us is that the CEO can make the company's decisions without shareholder approval. Such dealings between the CEO's private company and DRYS are questionable and fall in conflict of interest (of course they disclosed everything in the SEC filings).
- All-time high $42 million a share & All-time low $1.62 a share
- Cumulate reverse split 1-for-336,000 (=25 x 4 x 15 x 8 x 4 x 7)
- DRYS has to go up by 2,592,592,492% to reach its all-time high again
Worst Stock Rank #2
Ocean Power Technologies (NASDAQ:OPTT) is developing and seeking to commercialize its systems that generate electricity by harvesting the renewable energy of ocean waves.
- All-time high $274.80 a share & All-time low $1.30 a share
- Cumulate reverse split 1-for-10
- OPTT has to go up by 21,038% to reach its all-time high again
Worst Stock Rank #3
Microbot Medical (NASDAQ:MBOT) (formerly StemCells) is a medical device company specializing in researching, designing, developing and commercializing transformational micro-robotic medical technologies by leveraging the artificial and natural lumens within the human body. In August 2016, the Israeli company Microbot jumped 600% after merging with the U.S. company StemCells (STEM).
- All-time high $261.95 a share & All-time low $1.62 a share
- Cumulate reverse split 1-for-9
- MBOT has to go up by 16,070% to reach its all-time high again
Worst Stock Rank# 4
Concordia International (NASDAQ:CXRX) (formerly Concordia Healthcare, is a Canadian-based pharmaceutical company. On January 03, 2014, the company raised $520 million ($65 per share). That the company has never had a reverse split is a good thing.
- All-time high $88.89 a share & All-time low $1.09 a share
- Cumulate reverse split: N/A
- CXRX has to go up by 8,055% to reach its all-time high again
Worst Stock Rank #5
Arena Pharmaceuticals (NASDAQ:ARNA) is a biopharmaceutical company; it is focused on developing small-molecule drugs across a range of therapeutic areas. That the company has never had a reverse split is a good thing.
- All-time high $46.97 a share & All-time low $1.13 a share
- Cumulate reverse split : N/A
- ARNA has to go up by 4,057% to reach its all-time high again
Interestingly, the top 5 companies (in terms of market cap) trade on Nasdaq as well. Notably, all of the top 5 companies are technology companies:
- #1 Apple : (NASDAQ:AAPL) : $731 billion
- #2 Alphabet : (NASDAQ:GOOGL) (NASDAQ:GOOG) : $655 billion
- #3 Microsoft: (NASDAQ:MSFT) : $541 billion
- #4 Amazon: (NASDAQ:AMZN) : $483 billion
- #5 Facebook: (NASDAQ:FB) : $439 billion
Out of more than 3,200 stocks trading on Nasdaq, DRYS appears to be the worst. The question is whether you would invest in the worst stocks or the best/quality stocks. The worst stocks may good for shorting. Of course, shorting without call options can be dangerous because loss can be theoretically unlimited. To read my previous articles, please click here.
Note: On March 28, 2017, George Economou's other company Ocean RIG UDW Inc (NASDAQ:ORIG) filed for Chapter 15 bankruptcy protection in the U.S. court. Ocean Rig announced that it received conditional exception from Nasdaq delisting notice. Please feel free to share and comment your views on Nasdaq's decision to allow Ocean Rig to stay listed during the restructuring process.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.