Expert: "I don't know why it's rising... Feels like watching GameStop"
[Asia Economy Reporter Kim Suhwan] "It feels like we are witnessing the GameStop stock surge incident that absorbed all the issues on Wall Street earlier this year once again."
Bloomberg News made this assessment as the stock price of Robinhood, a U.S. online securities platform, surged nearly 90% in just two days.
Opinions on Robinhood's valuation within Wall Street are divided, indicating that the controversy surrounding the stock price surge is unlikely to subside easily.
On the 4th (local time), Robinhood's stock price on the U.S. Nasdaq surged 50% that day, closing at $70.39.
The previous day, it had risen about 25%, marking an 86% increase over two days.
It surged 90% within a week after closing 8% below its IPO price ($38) on the day it was listed, last month on the 29th.
Experts analyzed that multiple factors combined to cause this stock price surge.
First, the start of options trading on that day was identified as one factor that increased volatility. Additionally, Bloomberg News reported that Cathie Wood's ETF, ARK Innovation (ARKK), known as the "Money Tree Sister," was increasing its purchases of Robinhood shares, which also contributed.
In particular, on the 3rd, Robinhood's trading volume surged tenfold compared to the previous trading day, and the stock price began to rise sharply. According to data from Dow Jones, Robinhood was the second most traded stock in the U.S. market on the 4th.
According to the Wall Street Journal (WSJ), mentions of Robinhood's ticker symbol 'HOOD' surged on various social networking service (SNS) platforms such as Reddit's WallStreetBets, which triggered the GameStop incident earlier this year.
WSJ reported that individual investors appeared to drive the stock price surge by massively purchasing Robinhood shares while following the trend.
Experts evaluated this as a situation similar to the early-year surge of "meme stocks" like GameStop and AMC, which are stocks popularized on the internet.
Chris Grisanty, Chief Asset Strategist at MAI Capital Management, said, "It doesn't seem like the stock price is rising due to any specific reason," adding, "Just like GameStop surged without clear reasons, (Robinhood) is also rising, but no one really knows why."
An expert from consulting firm CG42 commented, "(Robinhood stock) is being traded based on emotions," and "As proponents and opponents fiercely clashed over Robinhood's future growth potential, trading volume increased."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
