GoPro Inc. (NASDAQ:GPRO)’s stock has rallied by 138% from its IPO price of $24 a share back in June attributed to the fact that its shares have been under locked down. Investors will be given an opportunity to unlock their shares later in the week a move that CNBC’s, Dan Nathan, believes could sink the stock even further in the market.
“All of those shares that are coming off-lock, not all are going to be sold but it is going to increase liquidity dramatically. The borrowing of GoPro Inc. (NASDAQ:GPRO) has been amazingly difficult making options prices really high. […] Options prices are likely to come down over the next two weeks with all these flow coming into the market,” said Mr. Nathan.
The stock is down by 41% from its high of $98 a share back in October waiting to see how far it can slide with the unlocking of the shares. Nathan expects the unlocking of the stock to be a big event this holiday season for a number of GoPro Inc. (NASDAQ:GPRO)’s investors who have been looking to unload their stakes at the current high levels.
History shows that with any unlocking of GoPro, the stock usually resorts to a downward trend seen by the November 19 event where the stock was trading at a high of $78 a share and is now down to $58 a share. The sentiments could essentially prompt many investors to offload the stock out of fear that the trend will continue.
The rally that GoPro Inc. (NASDAQ:GPRO) experienced at the opening of the bell early in the week is kind of curious according to Nathan considering the stock is a liquidity driven story with a high short interest.
“A lot of today’s option activity was in the December 26 weekly 54 and 50 puts. There is an 8% implied move from here until Friday’s close. At the money straddle for this week is of about $4.50 you will need to move above $62.50 or below $53.50,” said Mr. Nathan.
Free Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.