Investors should be careful with Robinhood’s swinging stock, four market analysts say.
One week since Robinhood’s initial public offering, market analysts are still wary of the stock. Shares of the online trading company have seen double and triple-digit percent swings this week, diving more than 14% on Thursday after a filing revealed that existing Robinhood shareholders planned to sell nearly 97.9 million shares over time. Here’s what four market analysts, including CNBC’s Jim Cramer, wanted to see from the name. Joe Terranova, senior managing director at Virtus Investment Partners, said the company needs to decide whether it wants to be in the social media spotlight: « Do you want to be a meme stock? And I think ultimately, that has to be the question that needs to be addressed here in the moment. If they don’t, the immediate strategy has to be ways to figure out raising more capital, taking advantage of the price appreciation, whether that’s through a secondary or other form of raising capital. That’s the way to defeat being this meme stock…. I don’t think they want to be a meme stock because what that ultimately is going to do is discourage institutional investors and it’s going to take the object, the attention, away from the true fundamentals of the company, and it’s all about volatility.
