September’s 7 Most Controversial Stocks: Buy or Bail?

Stock Market

The September slump is in full effect as the S&P 500 fell about 2% since the end of August. Still, investors are finding plenty to be excited about in today’s markets.

IPOs are back on the menu, as you’ll soon see – but not all new listings are worth investing in. Likewise, meme stock drama continues as moviemakers dilute shares and Trump-driven SPACs announce new deal developments.

Controversial stocks always make the news, and for good reason. When investors and analysts feel strongly (one way or the other) about a company, it’s bound to generate controversy.

But not all controversial stocks are worth investing in and, even if you’re bullish, they’re usually worth a closer look. Knee-jerk investing doesn’t usually pan out. These are seven of the most controversial stocks in September, alongside my perspective – buy or bail?

Nintendo (NTDOY, NTDOF)

A yellow Switch Lite from Nintendo (NTDOY) sits in front of a bright pink background.

Source: ESOlex /

Nintendo (OTCMKTYS:NTDOY, OTCMKTS:NTDOF) is having a wild month, but the broader market hasn’t yet caught up with the news.

First, a leaked rumor alleged that Nintendo and Google (NASDAQ:GOOG, NASDAQ:GOOGL) are working together to develop a virtual reality (VR) gaming headset. While nothing is confirmed, a prospective Nintendo/Google collaboration would be massive. 

More news dropped this week as leaked Microsoft (NASDAQ:MSFT) revealed that the tech giant also considered a Nintendo partnership. In the note, Microsoft Gaming exec Phil Spencer wrote of a potential partnership, “if any US company would have a chance with Nintendo we are probably in the best position.” In the same email, he alluded to activist shareholders building larger positions to “[push] for more from Nintendo stock which could create opportunities for us.” The email is from 2020 but still points to a high-level, ongoing commercial interest in Nintendo.

Even if neither partnership nor collaboration pans out, Nintendo is a stock to watch. If you want to build a position, note that you can trade two tickers on US exchanges: NTDOY and NTDOF. The differences are minor, but ensure your pick best aligns with your investment strategy and goals.  

AMC Entertainment Holdings (AMC)

The AMC Empire 25 Cinemas in Times Square in New York

Source: rblfmr /

Somehow, AMC Entertainment Holdings (NYSE:AMC) bulls (or apes, or whatever) are still hanging their hat on this controversial stock.

For now, the ailing movie theater firm narrowly avoided bankruptcy at the cost of massively diluting shareholders. Last week, a Delaware judge approved AMC’s reverse-split scheme, which will drop one billion preferred shares onto the market.

That move will dilute the stock by over 90%, punishing the retail traders who kept the stock limping along thus far even further. 

AMC fell sharply on the news, declining nearly 80% since August 10th. While those hoping for a short squeeze rely on the stock’s high failure-to-deliver rate to reinforce their anti-short thesis, it likely won’t be the stock’s saving grace.

While shorts closing positions might provide a temporary boost, it’ll likely be another dead cat bounce. If you haven’t yet bailed on this controversial stock, the time is rapidly approaching. 

Digital World Acquisition Corp (DWAC)

dwac stock: the Truth Social logo is seen displayed on a smartphone being held in front of an app store showing the app Truth Social

Source: rafapress / Shutterstock

Embattled SPAC Digital World Acquisition Corp (NASDAQ:DWAC) remains a controversial stock, but its future isn’t reassuring.

The holding company has been engaged in a two-year legal battle to merge with Donald Trump’s Truth Social platform. Since then, Trump’s return to X further dropped Truth Social’s leverage and made the deal even less attractive.

As of 2022, Truth Social saw just 500,000 daily active users. That’s a paltry customer base on its own but pales compared to X’s whopping 540 million users post-conversion from Twitter. 

Even if, for whatever reason, the deal closes soon, advertiser interest likely won’t be enough to keep the social media platform afloat.

SPAC-mania is long over, and conditions are far different today than when the merger began two years ago. This controversial stock is dead, but still overvalued, so jump ship while you can. 

General Motors (GM)

Image of General Motors (GM) logo on corporate building with clear sky in the background.

Source: Katherine Welles /

General Motors (NYSE:GM) is struggling in the face of ongoing United Auto Worker strikes, but the company’s long-term position hasn’t changed.

That makes this controversial stock a definite buy at today’s prices. While the strikes could slow GM’s ambitious electric vehicle delivery goals, it’s a blessing in disguise. GM, after announcing a plan to produce Silverado, Blazer, Equinox, and more EVs en-masse by year’s end, supply chain struggles slowed down their plans.

The ongoing strikes could be just what GM needs to tighten up its back-end operations and streamline supply chains before beginning production in earnest once the strike ends. 

Alongside GM’s EV endeavors, its continued foray into in-vehicle software sales promises to juice revenue down the road.

By 2030, GM expects an additional $25 billion from software sales annually, improving its profitability even if workers get a (well-deserved) raise. With Morningstar calling GM 56% undervalued even amid worker strikes, this controversial stock is an easy call – buy. 

Nikola (NKLA)

Image of NKLA logo on phone screen

Source: Stephanie L Sanchez /

Nikola (NASDAQ:NKLA) announced a new chief operating officer this week, sending shares of the controversial stock soaring. But new blood in the c-suite won’t be enough to save this EV company, even if new hire Mary Chan has experience working in the car industry. 

Overcoming the founder’s fraud conviction was never an appealing prospect, and the Nikola name is forever (deservedly) tainted, but recent moves point to a dire financial position at Nikola.

The company is burning cash far faster than it brings in sales (which aren’t great either). Last quarter, Nikola posted just $15.36 million in revenue against massive costs, putting profitability at a resounding $845 million loss over the preceding 12 months. 

In a last-ditch effort, Nikola issued convertible notes paying 5% annually. That’s a high cost of debt for a cash-hungry company and represents a genuinely desperate play to stay afloat.

Investors should also note that debt holders are usually paid first in bankruptcy liquidation, and there may not be enough assets to reimburse shareholders. If you haven’t yet bailed on this controversial stock, do it before it’s too late. 

Instacart (CART)

Person holding cellphone with webpage of US retail company Maplebear Inc. (Instacart) on screen with logo. Focus on center of phone display. Unmodified photo. CART stock, Instacart IPO

Source: T. Schneider /

Instacart (NASDAQ:CART) hit the markets hard this week, IPO pricing peaking at $42 per share before settling to around $33.

That makes Instacart worth about $11 billion, a tough pill for late-stage private investors who bought in at a $39 billion valuation. Still, for the retail set, this controversial stock is one to buy even if its post-IPO slump temporarily puts your portfolio in the red. 

The company holds 70% of the home grocery delivery market in the United States. That market was weak pre-pandemic but exploded as more Americans stayed home. Today, the trend remains and is accelerating.

Half the country already uses at-home grocery delivery services, with further growth forecast. That’s reflected in Instacart’s initial filing, as transaction volume grew by $4 billion between 2021 and 2022.

Ultimately, Instacart has legs and room to grow – even at a reduced valuation.

Arm Holdings (ARM)

The Arm logo seen at semiconductor and software design company Arm Holdings' US Headquarters in San Jose, California. ARM IPO

Source: Tada Images /

Arm Holdings (NASDAQ:ARM), like Instacart, debuted on the market this month. Unlike Instacart, Arm’s revenue is shrinking. Over the past year, the chip maker’s annual revenue fell 1%.

That may not seem bad in light of a tight economy but don’t overlook the fact that this controversial tech stock is riding the same wave that made Nvidia’s (NASDAQ:NVDA) sales explode. Falling revenue in light of artificial intelligence and semiconductor exuberance doesn’t bode well for this stock.

Even if Arm has viable long-term prospects, which it arguably does, it isn’t priced to buy at these levels. The stock trades at 153x earnings. That makes Nvidia, which is also overpriced, a value play by comparison as it trades at “only” 106x earnings.

This controversial stock might have room in your portfolio to diversify your semiconductor stocks. But don’t bet the farm on Arm. 

On the date of publication, Jeremy Flint held a long position in NTDOY. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at

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