Robinhood Soars After Becoming Latest Meme Stock Darling, AMC & GameStop Tumble

After a year of Robinhood Markets Inc HOOD users being associated with extreme moves in so-called meme stocks, Robinhood shares themselves have now officially entered into meme stock territory.

What Happened: In the past two days, shares of Robinhood have skyrocketed 95.3% without any meaningful news from the company. However, social media is buzzing about Robinhood.

The stock is by far the most mentioned ticker on Reddit’s WallStreetBets subreddit. In fact, HOOD has nearly 6.5 times more WallStreetBets mentions than any other ticker over the past 24 hours, according to SwaggyStocks.

New Top Meme Stock? The latest meme stock mania may be taking the steam out of some of the previously trending meme stocks. AMC Entertainment Holdings Inc AMC shares traded lower by 9.2% on Wednesday, while GameStop Corp. GME shares traded lower by 3.3%. Ironically, Robinhood was the target of an extreme amount of criticism earlier this year for temporarily restricting buying in other meme stocks.

After closing Tuesday’s session at $46.80, Robinhood hit $85 shortly after the open on Wednesday morning.

Related Link: Robinhood Stock Roars Back, But Weak IPO Launch Is Historically A Bad Sign

Dennis Dick, co-host of Benzinga’s PreMarket Prep, pointed out that the stock was halted just seconds later after it dropped to $72.12 and triggered its limit down circuit breaker. “At this point it’s just gambling,” Dick said.

Dick said Robinhood is proving to be the ultimate social media stock, but added that there is also at least one market-related cause of the extreme volatility.

“Crazy volatility as options just came out today and strikes are somewhat limited. As options volume picks up and more strikes are added, it should reduce volatility,” Dick said.

Cramer’s Advice: Robinhood said about 301,500 Robinhood users, or about 1% of the company’s total users, invested in the stock last week at its $38 IPO price before it began trading.

CNBC's Jim Cramer, who is a Robinhood bull, said investors who bought at or below the IPO price should take at least some profits in the $70 range and not get too greedy.

"If you got some of the deal, I would sell half and let the other half run," Cramer said. "I want them [Robinhood users] to make it so they play with the house's money.”

Benzinga’s Take: Robinhood’s IPO priced at the bottom of the company’s targeted price range, suggesting there was no significant institutional buying interest at prices above $38.

After Robinhood closed its first day of trading a week ago own more than 8% on the day, some Wall Street veterans are now left puzzled at the idea that retail traders who were unwilling to buy Robinhood stock just a few days ago at prices as low as $33.25 are now apparently clamoring to buy shares of the same stock at above $70.