CNBC’s Jim Cramer on Wednesday urged Robinhood shareholders to reduce some of their positions after the brokerage firm’s shares got trapped in the meme stock frenzy it helped catalyze.
Robinhood shares hit $ 85 each in Wednesday’s trading session, before finally closing 50.4% at $ 70.39. The strong advance was added to the 24.2% gain recorded on Tuesday by the share.
“Meme stocks are easy money on the upside. But as we’ve seen recently with GameStop and AMC, you have to take profit while you still have it by gradually selling on the upside,” he said. host of “Mad Money”. , referring to the video game retailer and movie theater chain that were at the forefront of the Reddit-fueled meme stock movement that began in January.
“No matter how much you love [Robinhood], discipline always trumps conviction, and discipline says you have to take something off the table when you have an 80% gain in two days. “
On Monday night, Cramer recommended investors buy shares of Robinhood because he believed co-founder and CEO Vlad Tenev would help the stock market app transform into a diverse fintech player competing with Square and PayPal.
Robinhood went public last week, valuing its shares at $ 38 apiece. Some of its IPO shares have been awarded to its retail clients, a rare step on Wall Street, where only institutional investors and high net worth individuals typically have access to the offering.
Robinhood had a rough first session, losing 8% to end at $ 34.82. The stock traded at $ 33.25 in its still limited sample of publicly traded stocks.
“If you got this one in the thirties and you haven’t sold anything yet… I recommend you ring the ledger on some part of your set,” Cramer said Wednesday. “But I also recommend keeping some of it,” Cramer added, doubling his confidence in Tenev to help Robinhood thrive in the long run.