The Next Rite Aid? 7 Companies That Could File for Bankruptcy in 2023

Stocks to sell

Bankruptcy filings are on the rise. As the economic good times of the past few years are seemingly drawing to a close, it’s creating trouble for many publicly traded companies. This has led to the rise of bankruptcy predictions in this article.

Retail companies have been particularly hard hit. Firms such as Bed Bath & Beyond, Party City, and Rite Aid are among those that have already filed for bankruptcy and had their stocks delisted in 2023. All told, there have already been more bankruptcies in 2023 to date than in the full year 2022 or 2021.

With interest rates continuing to soar and a potential recession on the horizon, things are likely to get worse before they get better. Here are seven stocks that investors should be especially wary of, given their poor balance sheets and potential bankruptcy risk.

So here are my following bankruptcy predictions.

Wework (WE)

Source: GaudiLab / Shutterstock

It’d be easy to blame the pandemic for shared office space company Wework’s (NYSE:WE) financial problems. And the public health event certainly reduced usage of various Wework locations for quite a while.

However, the company was already on a troubled trajectory well before COVID-19. According to the book, The Cult of We, under founder Adam Neumann, the company spent lavishly and had a haphazard growth strategy. Once it struggled to raise additional funding, the firm was left with a bloated cost structure and no way to grow revenues enough to catch up.

Wework ultimately went public via a SPAC, but that didn’t fix the company’s problems. At its core, Wework has long-term leases on office space. Given the decline in the office market over the past few years, Wework’s leases are seemingly uncompetitive in the new economic marketplace. The easiest path to getting more favorable leases and a fighting chance at profitability would be through bankruptcy restructuring. This make it one of those bankruptcy predictions to keep in mind.

WE stock has dropped more than 97% over the past year. More troublingly, it has missed interest payments and its bonds are selling for pennies on the dollar. This suggests a bankruptcy filing could be imminent.

Meta Materials (MMAT)

Source: Shutterstock

For a time, Meta Materials (NASDAQ:MMAT) was a popular meme stock. The firm rose to prominence through a complicated spin-off as it divested energy assets from its functional materials business. This spin-off was, in theory, supposed to lead to a sharp short squeeze.

Fast forward to today, however, and Meta has failed to turn any of that potential into results for shareholders.

The company generated just $10 million in revenues last year, and analysts are projecting that figure to fall for full-year 2023. Needless to say, Meta is decidedly unprofitable and is resorting to heavy share dilution to fund the business. The former CEO was also just removed from the company. If Meta is unable to issue more shares in a timely manner to raise capital, bankruptcy could be the next step for the company.

AMC Entertainment (AMC)

Source: rafapress /

AMC Entertainment (NYSE:AMC) has been one of the most controversial stocks out there over the past couple of years.

However, it appears that the show is almost over for AMC. This summer, CEO Adam Aron warned that the company was at risk of running out of cash if it couldn’t sell new shares of stock to the public. Shareholders eventually gave Aron the go-ahead to make a fresh equity offering, which raised $325 million.

That lowered the firm’s immediate bankruptcy risk to a degree. However, AMC lost more than $700 million over the past 12 months. It could burn through the new capital rather quickly, given the industry’s poor operating results. That’s especially true as the recent writers’ strike slowed down the pipeline of upcoming new releases. All in all, it’s one of those bankruptcy predictions to remember.

AMC has done a valiant job trying to avoid restructuring. However, like Wework, at the end of the day, bankruptcy reorganization would be one of the plausible ways to cut costs, get out of bad leases, and otherwise try to salvage a working profitable business out of AMC’s current struggling operations.

Canoo (GOEV)

Source: Steamaze

Canoo (NYSE:GOEV) is a small firm that was attempting to disrupt the electric vehicle market. It came to the public via a SPAC and had an intriguing business model based both around building its own vehicles and outsourcing its intellectual property to others.

However, most of these plans failed to materialize. Canoo attempted to pivot the business and cut costs once its initial plans didn’t garner commercial adoption.

But it doesn’t appear to be working. The company generated no revenues last quarter. And its auditor warned that the firm is at risk of no longer being a going concern if it can’t raise more cash. Given Canoo’s inability to generate commercial interest in its solutions, it’s unclear why investors would want to keep funding the company for much longer. It’s one of those bankruptcy predictions to remember.

Mullen Automotive (MULN)


Mullen Automotive (NASDAQ:MULN) is another small, and to-date, unsuccessful electric vehicle company.

It has announced a dizzying array of partnerships, ventures, and acquisitions. The company has published an astounding number of press releases over the past few years. All this motion might look like progress. This makes it a key stock to keep in mind when considering bankruptcy predictions.

And yet, there has been virtually no sign of it in the company’s financial results. Last quarter, the company generated a mere $308,000 in revenues from vehicle sales. That’s a vanishingly small number for a car company. Meanwhile, Mullen racked up a hefty operating loss of $53.8 million while generating that tiny amount of revenue.

Mullen has kept the lights on through unceasing share dilution. But with the share price in the pennies, and potential delisting on the horizon, Mullen may lose access to fresh capital and end up in bankruptcy in coming months.

Big Lots (BIG)

Source: ESB Professional /

Big Lots (NYSE:BIG) is a discount retailer. It operates with a “treasure hunt” style approach, aiming to dazzle shoppers with a wide array of interesting and unexpected products at discounted prices.

In recent years, Big Lots changed its store format pretty heavily, leaning much more into furniture. This seems to have not worked; it turns out people buy consumables such as food and cleaning products far more frequently than they do furniture, and as such, Big Lots has had trouble managing its inventory and keeping profit margins up.

It ran into more acute issues earlier this year when a key furniture supplier abruptly closed. Putting it all together, analysts are worried that Big Lots will follow the path of other discount retailers, such as Tuesday Morning and Christmas Tree Shoppes, which have already gone bankrupt.

Qurate Retail (QRTEA)

Source: / Shutterstock

Qurate Retail (NASDAQ:QRTEA) is another struggling retail firm.

It operates as a video-driven shopping across linear TV, e-commerce sites, digital streaming, and social media. Its bread and butter is through marketing its products on TV shopping shows. This used to be a very popular and effective form of product marketing, but its fortunes have faded along with the decline in linear TV.

Qurate has a heavily leveraged balance sheet. That worked well in the good times when the business was growing. But with the company’s operations now struggling, its debt load is becoming a massive challenge. An unfortunate fire at a key company warehouse further disrupted the company’s momentum. Between the poor balance sheet, potentially outdated business model and a slumping economy, and Qurate may struggle to avoid bankruptcy restructuring going forward.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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