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Opinion: Another rough day for MAGA meme stocks, but at least they’re not Robinhood

The one factor falling sooner than MAGA meme shares is likely to be a meta meme inventory.

The manic power that retail traders — and different parts — had been displaying on Thursday and Friday by throwing buckets of cash at SPACs kind-of-directly and even loosely affiliated with Donald Trump seems to have worn off. Shares of Digital World Acquisition Corp.
DWAC,
-29.56%

and Phunware
PHUN,
-39.25%

fell off their frothy cliff on Monday and Tuesday as traders appeared to weigh the heightened risk of investing in a SPAC that has but to shut, and particularly one which has not yet communicated any kind of revenue-generation plan.

And within the case of Phunware, it looks as if even essentially the most optimistic MAGA dealer pale the case for purchasing right into a tiny software program agency that has by no means turned a revenue at like 16x its 52-week common on the thesis that it had worked with Trump through a proxy once and might do so again.

That mentioned, traders do nonetheless look eager to take action at 3x.

And whereas DWAC is down greater than 55% from final week’s peak, it’s nonetheless up 488% within the final 5 buying and selling days, as a result of hope springs everlasting for backers of the SPAC’s shares that the lately half-birthed Trump Media & Know-how Group can nonetheless show sure haters improper by busting out with an in depth and well-reasoned enterprise mannequin within the coming days or even weeks.

Talking of the fragility of hope: Robinhood
HOOD,
+1.44%

introduced its third-quarter results after the closing bell on Tuesday!

The zero-commission buying and selling app for millennials didn’t handle to clear an already low bar of expectations, badly lacking on nearly each metric and revealing numbers that convey an organization that’s nonetheless spending by itself development however failing to develop its income or customers, and never capitalizing almost sufficient on the prevailing customers it has been in a position to retain.

It doesn’t assist issues that income on crypto buying and selling additionally fell for the quarter, as a consequence of wider adoption by different buying and selling platforms and devoted exchanges comparable to Coinbase
COIN,
-1.86%
.
On a name with analysts, Robinhood Chief Govt Vlad Tenev spoke at size about how psyched he was for the corporate to unveil its crypto-wallet expertise and touted the expansion of latest merchandise, however it all felt like an opportunity to place defibrillator paddles on the momentum that Robinhood had going into 2020.

Maybe essentially the most telling stat from Tuesday’s launch is that Robinhood generated $65 per person within the quarter, down from $137 within the first quarter of this 12 months, when it had…much more customers.

And we haven’t even talked about what the SEC has in retailer for the way forward for payment-for-order move, i.e. “How Robinhood makes most of its cash.”

Robinhood shares fell as little as 9.5% in after-hours buying and selling.

Ultimately, Tuesday’s meme motion (GameStop
GME,
+2.22%

was up 2.2% however AMC Leisure
AMC,
-2.12%

was down 2.1%) was about nothing meme-y within the slightest.

In truth, Tuesday was about essentially the most elementary side of buying and selling: Investing in an organization that can become profitable.

Whereas some traders — politically motivated or not — received extra reasonable about MAGA memes, they continue to be in a heightened state of optimism as a result of they haven’t seen precise failure.

On Tuesday, another traders very a lot did.

https://www.marketwatch.com/story/another-rough-day-for-maga-meme-stocks-but-at-least-theyre-not-robinhood-11635288200?rss=1&siteid=rss | Opinion: One other tough day for MAGA meme shares, however not less than they don’t seem to be Robinhood

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