Investing in Robinhood stocks in 2020 should come with a manual — you never know when you’re going to find a winner, or if you’ve landed on a Robinhood stock to avoid.
Well, that’s a bit of a lie: You know you have a dud when all your money begins to go down the drain.
Robinhood is a free trading app (and web-based platform) that allows investors to trade stocks, options, ETFs and cryptocurrency without any commissions or fees.
Robinhood is engineered to help traders (both new and familiar) build up experience with the stock market with a focus on growth stocks that have the strongest results.
This also means that Robinhood investors are willing to take bigger chances on stocks if they think there’s a possibility of success. This “get rich quick” mindset combined with novice investors can lead to them pooling all their money in terrible stocks that they should have avoided… and there’s a new stock that’s blowing up on Robinhood that investors love to hate.
Traders, I’ve decided to start a new segment where I cover the dirty dogs of Robinhood that you need to stay the heck away from. And today I’m seeing major warning signals from Draftkings Inc (Nasdaq: DKNG).
Now to be fair, even I joined the bandwagon of this fantasy sports betting operator. If you’ve been a member of my Sweet Spots Stocks program since the beginning, then you know this stock was also our very first trade.
Recently the stock went from under $20 to all the way up to trading at $35 per share — and this is where I got out. (Though it ended up climbing to $64. In both sports and trading, hindsight is 20/20.) But after the run-up, DraftKings fell back down to $50 a share, and that’s when we saw all the Robinhood traders start piling into the trade.
As soon as the pile-on began, everyone started getting their butts handed to them. Days later, the stock went down even further — selling at less than $43 a share — and there is no more bullish view in sight.
CEOs and insiders are dumping shares, and I think I know exactly why: Sports have become boring and somewhat trivial, especially when we can’t even leave our houses to watch our favorite games live.
And if things keep playing out like they are currently with this stock, then I think we may have another Nikola Corporation (Nasdaq: NKLA) on our hands…
Watch the video below to see what I’m anticipating to happen with DraftKings. What do you think about this Robinhood stock? Do you think it’s worth your investment? Let me know in the comments down below!
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