GoPro Inc. (GPRO) Option Play On Stock Unlocking: Dan Nathan

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.

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