Growth stocks have fallen out of favor over the last few months amid expectations for tighter Federal Reserve policy. With some stocks having fallen 70% or 80% from their highs, Ritholtz Wealth Management's Josh Brown expects to see more acquisitions in the near term.
"We just witnessed a massive deal with Microsoft Corporation MSFT buying Activision Blizzard, Inc. ATVI," Brown said Friday on CNBC's "Fast Money Halftime Report." "If you think that's the last one we're going to see in Q1 with the Nasdaq down 19%, I think you'd be wrong there."
He highlighted Robinhood Markets Inc HOOD as a potential buyout target.
Although Brown reiterated that he's been negative on Robinhood's stock since it was trading around $70 per share, he thinks it offers "super low risk" as an acquisition target.
Robinhood's market cap has fallen to $9 billion and the company's net capital is close to $3 billion, Brown emphasized, suggesting that Goldman Sachs Group Inc GS could acquire Robinhood for around $6 billion. "I think there are a lot of situations like that," he added.
"There's a certain point where maybe not all the air has come out," Brown said. "But too much has come to still want to press those bets. Not in all cases, but I think in some very big well-known names."
HOOD Price Action: Robinhood has traded as high as $85 since its IPO last year. It made new lows during Friday's session, before rebounding and trading higher.
The stock was up 7.54% at $12.49 at the time of publication Friday afternoon.
Photo: Courtesy of Robinhood.
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