Of course WallStreetBets bet on Robinhood. HOOD proved me wrong...

It sometimes doesn't matter how long one has spent looking at the stock market, there are some obvious things that can happen that are not spotted by even veteran investors... Firstly, for those of you that have missed it, Robinhood shares started trading last week at a price of $38. For the first few days, the IPO was a bust... Here we are a week later and the price has doubled in that time. For those that are fans of graphs:

The cause of the bounce this week?

  • WallStreetBets talking up the stock
  • Options trading began on HOOD
  • Overhang from "weak" hands had been taken out in the first few days of trading.
So where does that leave us now?
  • A stock that is worth almost as much as ICE, the owner of the NY Stock Exchange

  • A stock that doubled in the space of 2 trading sessions and up 85% from it's IPO price
  • The second most actively traded share on the US markets and most active stock on the retail platforms operated by the big brokerage firms.
What to do now. Well from a medium/long term perspective I certainly don't believe that one should own HOOD at these levels. That being said, it would be foolish to bet against it as well. As we know, part of what makes stock prices move is the underlying fundamental business of the company (which is certainly decent enough) but the other key element is whether or not investors/traders perceive that other investors/traders will buy/sell the shares. At the moment, the momentum (pun intended) is too strong and certainly the stock could head higher and touch triple digits. So if you want to trade it, just be careful not be left holding the bag...

Bonne Chance!

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