Stocks such as King Digital Entertainment PLC (NYSE:KING) and Crumbs Bake Shop Inc (OTCMKTS:CRMB) are all one hit wonders and these stocks shoot up like anything backing a single blockbuster product. However on a longer run, it’s tough to survive on the market with just one single good product. However the craze around these stocks makes us feel as if these would stay the same forever.
FMHR Trader Josh Brown was on CNBC’s “HalfTime Report” with few other analysts and traders and he compared the current craze in the one hit wonder stocks such with that of the poker stock craze back in 2005 and Iomega. He said that analysts and investors usually hypothesize the momentary trends in the stock ad if it is never going to stop.
Brown mentioned how Crumbs Bake Shop Inc (OTCMKTS:CRMB) went public in the perfect time and that hurt the investors as it was only going to go down. The price of the cupcakes also didn’t help the stock a lot as we don’t usually eat a $4 cupcake even once a week. He also mentioned about Crispy cream and basically all these stocks only depend on the craze of their products and if they don’t come up with interesting and innovative products, the brand is not going to push them around for a long time in the current market.
“I think, by the way, Candy crush is a really good example of something that could go down this road; where the novelty wears off, people get bored, they move on to the next.” Brown stated about how King Digital Entertainment PLC (NYSE:KING) might go down once Candy Crush craze is over.
Pete Najarian disagreed with Brown’s views and he said that that companies such as King Digital Entertainment PLC (NYSE:KING) are not just one hit wonders. Najarian mentioned about the games produced by the company and how these games continue to top the charts on various smartphone platforms. He also said that the company is not about Candy Crush and it has other names.
Najarian feels that the stock will be on a high for some time and they also have other games which are doing well in the smartphone space.