Whether you're betting on meme stocks or investing for long-term gain, there is the potential to make millions. But there is also potential to put your hard-earned dollars at risk.

Investors who stick to a long-term strategy can become millionaires over the course of years -- think investors in the cannabis industry, or possibly those who select a favorite turnaround play for the long haul. When it comes to retail investors who target companies with a high short interest (say, 20% of shares outstanding), that timeline can shorten to just a few days or weeks. And where the two strategies cross paths, you find the investors who just happen to get lucky. But getting lucky can also lead to frustration, uncertainty, and risk along the way.

The two stocks below have both seen challenges. One has legitimate turnaround potential, while the other could benefit from the hype despite the holes in its business. What happens when the Reddit r/WallStreetBets crowd takes notice of either one?

Man with frustrated look seated in front of laptop at outdoor cafe

Image source: Getty Images.

A cannabis company that's missing the mark

For cannabis investors focused on the long term, it's important to look for businesses that are showing profits and expansion, are innovative leaders in the industry, and/or have a team of executives with vast experience and knowledge to put their company in the best possible scenario to be successful.

Aurora Cannabis (ACB -1.80%) is not one of them. The business has found its way into the spotlight thanks in part to hype and hope, but its financial stability is lacking. The company has failed repeatedly to grow revenue or meet consensus estimates on earnings. For the most recent quarter, which ended in March, Aurora reported a loss of $0.24 per share, missing estimates by 21% for revenue and by 41% for earnings -- marking two straight quarters of missing on earnings by more than 40%.

Although Aurora calls itself the No. 1 licensed producer of medical cannabis in Canada by revenue, and No. 2 by global cannabis sales, the company only represents 19% of the Canadian medical market. It relies heavily on international medical cannabis sales, and the momentum in that market gives it something to build on. But it will need to continue with its cost-cutting program, which saw selling, general, and administrative expenses down by 42% year over year in the most recent quarter. Management is hoping to eliminate $60 million to $80 million in annual expenses over the next 18 months. There are better plays in the medical and recreational-use cannabis market that offer more potential for less risk.

A big name from the past looks to the future

Some long-term investors are targeting BlackBerry (BB 0.81%) as a turnaround play. The company is in the midst of a strategic transition away from making smartphones and toward providing security solutions in the space known as the Internet of Things (IoT): internet-connected objects that collect and transfer data over a wireless network.

For BlackBerry's long-term investors, the good news is that the company provides products and services supporting the healthcare and transportation industries. The cybersecurity market in healthcare is projected to grow at a compound annual growth rate (CAGR) of 15.6% through 2026, while the transportation security market has a projected growth rate of 8% through 2027. 

Management's new BlackBerry QNX real-time operating system platform is being used across various industries; it's currently running in 175 million vehicles, and the company recently added four more design wins to its growing list of top 25 electric vehicle original equipment manufacturers (OEMs) -- companies that provide the specifically designed components for a vehicle -- bringing its total to 23 of the top 25, an increase of 21%. Volvo is among these names, and has selected QNX as its primary software supporting the main electronic control units of the 300,000 heavy vehicles that Volvo manufactures each year.

The bad news has come in the form of the company's recent financial results. Thanks in part to the COVID-19 pandemic, revenue is down year over year, along with lowered margins and a higher per-share loss. But if there is a light at the end of the tunnel, it may be coming from the QNX platform -- having the system in 23 of the top 25 OEMs puts the company front and center for the electric vehicle manufacturers that own 68% of the electric vehicle market, and that market is very young. As it evolves with new technology requirements and vehicle models it will provide Blackberry with more opportunity for new design wins, and potentially lead to an increase in the number of electric vehicle manufacturers and number of vehicles it supports.  

Easy come, easy go

Where it gets interesting for long-term investors is when the r/WallStreetBets community starts hyping BlackBerry or Aurora as the next AMC Entertainment Holdings or GameStop, which have seen gains in the neighborhood of 2,200% just this year, and have made some millionaires overnight. In fact, BlackBerry's stock has spiked twice this year for this reason, first in January when it went from $7 to over $25 in a matter of three weeks, then in the last week of May when it made a second run from $8 to $16. These small bursts can add some excitement to an investor's day, but the inconsistency and uncertainty about whether the company will be the next AMC or GameStop can also bring about quite a few "what should I do" moments. This type of hype could be detrimental to BlackBerry shareholders if they believe in the company's turnaround potential but are still subject to the whims of investors who take profits with no baseline.

For Aurora investors, the only positive growth in share price for the past two years has come from external news, such as a new administration being voted in, or a recent comment by CEO Miguel Martin referring to news about Amazon's take on a marijuana policy. No Aurora company news has been able to move the price in a positive direction. Becoming a meme stock and a focus of retail investors may be all that's left for original investors looking to get back something before they exit. 

Meme stocks trade against the grain of fundamental investing. When a company with true turnaround potential gets sucked in, it can be frustrating and sometimes disappointing. When it happens to a company with not much else going for it, it can be a blessing in disguise for shareholders looking for a way out.