CNBC’s Jim Cramer on Wednesday urged Robinhood shareholders to cut some of their positions after the brokerage firm’s own shares got caught in the meme-share frenzy it carried as a catalyst.
Robinhood stock rose as high as $ 85 apiece during Wednesday’s session before eventually closing 50.4% at $ 70.39. The big surge contributed to the 24.2% gain the stock posted on Tuesday.
“Meme stocks are easy money on the way up. But as we’ve seen lately at GameStop and AMC, you have to take profits while you still have them by gradually selling on the way up, “said the Mad Money host, referring to the video game- Dealers and the movie theater chain were at the forefront of the Reddit-fueled meme stock movement that began in January.
“It doesn’t matter how much you love [Robinhood]”Discipline always trumps conviction, and discipline says you have to take something off the table when you’ve got 80% growth in two days.”
On Monday night, Cramer recommended investors buy Robinhood shares because he believed co-founder and CEO Vlad Tenev will help the stock trading app transform into a diversified fintech player that rivals Square and PayPal.
Robinhood went public last week and its shares were priced at $ 38 each. Some of the IPO shares have been given to retail customers, an unusual move on Wall Street where normally only institutional investors and high net worth individuals have access to the offering.
Robinhood had a rocky debut session, dropping 8% to $ 34.82. The stock traded in its still limited selection of publicly traded stocks down to $ 33.25.
“If you got these in the thirties and haven’t sold anything … I recommend calling part of your position on the registry,” Cramer said on Wednesday. “But I also advise holding onto part of it,” added Cramer, doubling his trust in Tenev to help Robinhood thrive over the long term.