Nokia course goes crazy: Stampede in the herd of small stocks
No time right now?
The shares of the Finnish technology group Nokia are suddenly in great demand. Apparently, the same herd effect is in play here as with Gamestop and Blackberry.
On Monday, Nokia shares were in the focus of users of the Wallstreetbets forum got on Reddit. After the US market opened, the title was actively promoted in the forum. That ensured a price increase of 15 percent on the same day, on Tuesday the increase was almost 7 percent by noon.
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Trading volume rises to up to a billion papers a day
That doesn’t sound particularly spectacular at first. Behind it are 296 million Nokia shares traded on Monday alone. The 30-day average for the paper is around 37 million. That comes from Bloomberg data.
Nokia was still behind Blackberry, whose paper was able to close with a plus of 28 percent and the Gamestop title, which came to an increase of 18 percent.
On Wednesday, Nokia then started to take off. At its peak, the share rose by 84 percent, in the evening the increase compared to the market close the previous day was 54 percent. The volume of shares traded approached a billion.
Nokia: No reliable reasons for price increase
Nokia has now officially commented on the processes and an opinion released:
“Nokia has no knowledge of material, unpublished company developments or material changes in its dealings or matters that have not been publicly disclosed that would be responsible for the recent increase in the market price or trading volume of its shares.”
In other words, Nokia has no idea what could explain the massive increase in trading volume and share price.
Nokia first European target for Robinhood traders
Reddit investors, also known as Robinhood Traders based on a widely used low-cost trading app, have pushed dozens of US stocks up in the past few weeks. Nokia, meanwhile, is the first European destination for the herd of retail investors.
Experts explain the attractiveness of the title with a combination of a certain nostalgia for a formerly strong brand and a low starting price. This mixture induces people to buy paper almost blindly.
The Nokia paper is basically not in a row with stocks like Gamestop. Nokia may not be a completely healthy company at its core, but it is no longer the dying cell phone giant of the 1990s.
Rather, Nokia has now specialized in telecommunications infrastructure. The company is applying worldwide for the expansion of the new 5G networks and has been quite successful, not least because of the restrictions against its main Chinese competitor Huawei.
Experts find it difficult to make recommendations for dealing with Nokia paper, but unanimously point to an almost incalculably high volatility. This would result in risks for the security of the investment that significantly exceed the typical investment risks.
