Robinhood share price too high, JPM says: banks see 20% drop

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If you thought things couldn’t get worse for Robinhood stocks, think again, JP Morgan just released the retail broker’s first sell note. The bank predicts that Robinhood (NASDAQ: HOOD) will end the year at its lowest, predicting slow user growth and increased supply could push the price down to $ 35 by the end of the year.

Shortly after Robinhood made its poorly received Nasdaq debut at $ 38.00 on July 29, things started to get interesting. By August 5, Robinhood stock had exploded 125% and changed hands above $ 70.00. However, since then HOOD has performed horribly and, at yesterday’s closing price of $ 42.08, has given up over 50%. A trend which, according to JP Morgan, will continue for the rest of the year. The bank highlights two reasons for its underweight position. First, user growth has fallen off a cliff in recent months. Since the second quarter, daily active users have fallen 40% and app downloads are down 78%. Second, JPM warns that ending the early investor blocking period will lead to selling pressure.

HOOD Price Predictions

Since Robinhood has only been traded for three months, the 2-hour price chart doesn’t make any convincing argument anyway, although it does point to the poor performance of the Robinhood stock. However, the price seems to find support between $ 38.00 and $ 39.00 and based on that, if HOOD loses this level, it could sell.

If Robinhood is trading below its IPO price of $ 38.00, it should expand towards JPM’s $ 35 target. Additionally, if general equity weakness persists, an argument can be made for a trip to the lifetime low of $ 33.29. However, if the stock erases the September 23 high at $ 47.79, that will invalidate the bearish thesis.

Robinhood stock price chart (2 hours)


robinhood stock (NASDAQ: HOOD)

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