May 3, 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:
FuboTV (FUBO)
FuboTV’s 17.75% single-day plunge following its first-quarter earnings report reveals an accelerating existential threat to its business model. While revenue grew modestly by 3.5% to $416.3 million and losses narrowed to $0.02 per share (beating expectations), these surface-level improvements mask a far more concerning trend: rapidly declining subscriber numbers. North American paid subscribers fell from 1.676 million to 1.47 million in just one quarter, while international customers declined from 362,000 to 354,000. Most alarming is that these declines represent year-over-year drops of 2.7% and 11% respectively, indicating this isn’t merely seasonal volatility but a structural deterioration in the company’s customer base.
Management’s forward guidance suggests this negative momentum is accelerating rather than stabilizing. The company expects to end the current quarter with fewer than 1.3 million North American subscribers and no more than 335,000 international customers – projections that imply double-digit revenue declines across both segments. This accelerating customer exodus signals a fundamental marketability problem for streaming television services priced similarly to conventional cable, a challenge that appears to be industry-wide rather than Fubo-specific.
The pending merger with Disney’s Hulu, announced in January, is unlikely to resolve these core challenges. Hulu’s own live TV streaming service has stagnated over the past year, suggesting the problem isn’t brand recognition but rather the fundamental value proposition of cable-like streaming services in an era of proliferating stand-alone sports and entertainment options. Trading at $2.41, down from its 52-week high of $6.45 with extraordinary volume (45.3 million shares vs. 19 million average), FUBO shows clear signs of institutional abandonment. With razor-thin 10.12% gross margins providing minimal cushion against subscriber losses, no dividend support, and a business model increasingly at odds with consumer preferences, FuboTV represents a classic case where even significant declines may be prelude to further deterioration.
Tilray Brands (TLRY)
Tilray Brands epitomizes a company running out of viable options as it confronts deteriorating fundamentals across multiple business lines. The cannabis producer’s 26% April decline followed a dismal fiscal third-quarter report showing a 1% year-over-year revenue drop to $186 million, alongside a swing from an $885,000 adjusted profit to a $2.9 million loss. Perhaps most concerning was management’s decision to slash full-year revenue guidance from $950 million-$1 billion down to $850-$900 million – a reduction that suggests the company’s challenges are accelerating rather than stabilizing.
With the stock now trading at just $0.46, down from already depressed levels and well into penny stock territory, Tilray has resorted to financial engineering as a last-ditch effort to maintain its listing status. The company has proposed a reverse stock split at a ratio between 1-to-10 and 1-to-20, to be voted on at a special shareholder meeting on June 10. This extreme measure rarely addresses underlying business problems and frequently precedes further declines as it signals management’s lack of organic solutions to fundamental challenges.
Tilray’s attempt to diversify through craft brewery acquisitions appears increasingly misguided as beer consumption hit a four-decade low in 2024 according to the Brewers Association. This diversification strategy into a separate declining industry offers little prospect of offsetting cannabis market weakness. With a market capitalization now down to just $459 million despite billions in historical investments, and no catalyst on the horizon absent federal cannabis legalization (which isn’t imminent), Tilray presents a classic value trap. The stock’s ongoing volume decline (trading well below daily averages) suggests remaining institutional holders may be quietly exiting positions, potentially creating a narrowing window for retail investors to do the same before a potential final capitulation phase.
Opendoor Technologies (OPEN)
Opendoor Technologies faces a perfect storm of deteriorating housing market conditions that directly threaten its core business model. The company’s shares plunged 25% in April as housing data revealed a worsening environment for its iBuying operations, with mortgage applications down 6% year-over-year and pending home sales declining 2.8%. Record high housing costs – with the median U.S. monthly payment reaching an all-time high of $2,870 due to elevated prices and interest rates – have created an increasingly challenging market for Opendoor to profitably buy, renovate, and sell homes.
The fundamental challenge for Opendoor is that its business model depends on both liquidity and predictability in housing markets – two factors that have deteriorated substantially. While the company showed modest progress in Q4 with 25% year-over-year revenue growth and improving operational efficiency, these gains are likely to be overwhelmed by broader market forces. Recent Redfin data shows that while housing inventory is finally increasing (new listings up 6.1% and total homes for sale up 13.7%), this is occurring alongside reduced buyer demand – a potentially toxic combination for a company that profits from the spread between purchase and sale prices.
At $0.74 per share, down from a 52-week high of $3.09 and approaching its low of $0.72, Opendoor has seen its market capitalization collapse to just $543 million despite generating billions in historical revenue. The stock’s 8.40% gross margin provides negligible buffer against housing price declines, while elevated daily trading volume (42.7 million shares) indicates ongoing institutional selling. With consumer concerns about broader economic impacts from tariffs further suppressing housing demand, Opendoor appears caught in a downward spiral where market conditions are deteriorating faster than its internal efficiency improvements can compensate. For investors still holding positions, the combination of a fundamentally challenged business model and worsening housing market conditions suggests immediate reconsideration is warranted.
Bottom Line
This week’s featured companies share a common thread – they represent business models confronting fundamental shifts in consumer behavior and market dynamics that appear increasingly insurmountable. FuboTV faces accelerating subscriber losses as consumers reject cable-like streaming services, Tilray’s cannabis ventures and brewery acquisitions are both struggling in declining markets, and Opendoor confronts a housing environment where its core profit model is increasingly untenable. In each case, management teams are running out of viable options, resorting to financial engineering or mergers that fail to address underlying structural challenges. For investors still holding these positions, the window for orderly exits may be narrowing as institutional selling accelerates.
