I did it, traders. I bought Didi shares on Tuesday, and I know you think I’ve lost it. But hear me out: I don’t think it’s a terrible idea to be trading Didi stock. I just don’t.
The Chinese ride-sharing company had its initial public offering (IPO) on Wednesday, June 30, and was listed at $14 a share. Leading up to the event, there were a couple of media talking heads saying to buy as much Didi Global Inc. (NYSE: DIDI) as you can on the IPO… *cough, Cramer, cough*
But then on Tuesday, the Uber competitor got hit with some bad news.
Coming out of the holiday weekend, the Chinese government announced it was launching an investigation into Didi and removing it from the app store. At face value, the government is saying it’s over cybersecurity concerns.
U.S. investors aren’t so sure, but I’m not here to get into politics. I just want to talk about trading Didi stock.
Which leads me to the funny part about the talking heads pushing investors to buy on the IPO.
After the bad news, Didi’s stock began to tumble. On Tuesday, the first trading day of the week, shares were down to about $10.90 premarket off of last week’s high of $18…
And still haven’t climbed back up to be even close to IPO levels.
So, why did this happen after analysts were pushing so hard for this stock?
The short answer: Buyers got caught with their pants down and couldn’t take the pain anymore. And so, the selloff begins.
Either they bought on the IPO and were just down to much money, or their broker made them sell. And so, as I was sitting there, watching everyone selling off Didi stock due to negative sentiment…
I thought to myself, “You know what? I’ll be a buyer.”
It’s a risky trade, I know. But after watching prices tumble, I couldn’t resist picking up some shares…
If you want to know why I’m still trading Didi stock, check out my short video below. Make sure to like and subscribe to the channel — and hit that bell to stay up to date with the latest in the markets.
P.S. One former hedge fund trader just pulled back the curtain on a new trading method that only requires investors to participate in the market right before it closes.
From the time the market opens until about 3 p.m. EDT, Wall Street has the upper hand. But once 3 p.m. rolls around, the big funds on Wall Street start bleeding cash… which sends certain stocks crashing lower.
Take advantage of these cash bleeds during Wall Street’s weakest hour, and anyone can make huge returns the next morning when the market opens up again.