Cannabis stock surge is a 'Reddit re-do': Stephanie Link
Cannabis stock surge is a 'Reddit re-do': Stephanie Link
Stephanie Link, Hightower chief investment strategist and portfolio manager, joins ‘Closing Bell’ to discuss the surge in cannabis stocks in the market. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Several cannabis stocks dropped Thursday, giving up some of the sharp gains from earlier this week as Reddit traders piled into the names.
Shares of Tilray fell 49.7% after rallying 50% on Wednesday. Aphria lost nearly 36% and Aurora Cannabis fell 23.5%. Canopy Growth shares declined by 22%.
These pot stocks were poised to extend their rallies before Thursday’s open, surging in premarket trading. Shortly ahead of the market open, however, the names turned sharply lower.
The group of cannabis companies garnered attention this week from the same WallStreetBets Reddit army that contributed to GameStop’s epic short squeeze last month. The social media members have been posting messages about their profits in pot stocks and encouraging other traders to join in.
“Here we go my! TLRY to the mooon!!!” one post said Thursday.
“Weedstocks, the new WSB darling,” another post said.
However, the trade appeared to unravel on Thursday, with the stocks coming back down to Earth. Several analysts that cover the cannabis companies told CNBC on Wednesday the price action this week has little basis in fundamentals.
Part of the discussion on Reddit has centered around the pending merger between Tilray and Aphria. Other social media users have mentioned the possible decriminalization of the plant at the federal level under the Biden administration as a positive catalyst for the group.
The move in pot stocks could also be related to high short-interest ratios, which measure how many of a company’s traded shares are being used in bets against a company. GameStop and AMC Entertainment were targeted by retail traders in part because their high short interest made the stocks attractive candidates for a so-called short squeeze. Tilray’s short interest is equal to 22.5% of the shares available for trading, according to FactSet.
Some of these retail investors have been holding onto these stocks since 2017 and 2018 and are expressing optimism about the newfound interest from other investors.
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I prefer following the advice of WSB than these boomers
Why can’t retail investors sell out their stocks if they become overpriced? Why do SEC regulation "protect" investors by disallowing stocks sales if someone has less than 25k? Automatic bag holders…
Reddit has changed the game. GOOD!
long-term losers, mark my words: gamestop, hertz, bitcoin, tesla
long-term winners: buy AMAZON, APPLE, FACEBOOK, NVIDIA
capitol riot means a covid19 petri dish; we need another lockdown. we have Amazon Prime streaming and don’t need to travel or go to a commercial theater and avoid covid19, mass shooting (gun sales doubled in 2020), police killing like George Floyd, and exploding RVs like in Nashville, capitol rioters bringing pipe bombs
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We like the stock
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🎶 I was gunna be a rich greedy hedge fund manager… But then I got high… 🎶
Haha Fukkn hahaha!!
Ok boomer
Halo Collective 😎
√ ○ut $GPFT #hourglass pain patch approved patent and a offer to buy out Grapefruit Blvd Inc.
Pot stocks are not healthy for the market
Is this a news channel or opinion hit piece?
Wasn’t Tilray the last trade yesterday? Down 50%
This is the new mainstream media excuse for bad investing calls. Blame Reddit lol
Weed stocks this week, silver the week before.
All to divert from Gamestop so their masters, the short hedge funds can escape.
The volume throughout this week has shown that retail will not sell.
I wanna get high..
It’s hard to take CNBC seriously now, constant flip-flopping and when it goes sour, BLAME REDDIT, it’s the new scapegoat.
Boomers are panicking