UONE Stock: What to Know Abut Red-Hot Urban One Today

Today, shares of Urban One (NASDAQ:UONE) have seen some pretty significant selling. At the time of writing, UONE stock is down more than 15% on some pretty pessimistic sentiment today.

a room of slot machines in a casino to represent gambling stocks

Source: Shutterstock

Why the sour outlook?

Well, it appears a series of recent announcements have provided an extreme amount of volatility in recent days. Investors continue to digest the news flow, and are repricing shares in violent fashion.

These moves in recent days reflect what appears to be overreaction on both ends of the spectrum. Today’s 15% downside move follows yesterday’s spike of nearly 30% when the company announced the acceptance of its casino proposal by Virginia gaming officials.

Let’s dive into today’s move and what investors should make of this rapid decline.

UONE Stock Drops on Otherwise Good News

The specific reasons for today’s decline in UONE stock remain unclear.

Perhaps the degree to which UONE stock was bid up yesterday on news of its approved casino bid was unwarranted. That’s certainly possible. Investors who have run the numbers in discounting the prospective cash flows from this project may think UONE stock simply got too richly priced.

Other investors could be factoring in the possibility that this approval may not ultimately materialize. A vote is scheduled on the deal, which needs to be approved by voters via a special referendum by a simple majority. Some level of risk with respect to the deal falling through may be getting priced in here.

Additionally, investors may have wanted to lock in some of their 30% gains on this news. Some level of profit taking in stocks that see such a rapid near-term rise makes sense. Consequently, the Nasdaq Exchange has seen a red day today, and sentiment around growth stocks appears to be waning in recent weeks.

However, given the casino-like mentality in the stock market today, today’s move is a bit of a head-scratcher. This stock has been a volatile one of late, so perhaps that’s the one constant investors can bank on with this stock. At least, over the near term.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2021/05/uone-stock-what-to-know-abut-red-hot-urban-one-today/.

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