Tilray Finally Comes Off Potphoria

What a ride it was yesterday for Tilray. Today, Tilray’s stock price opened at $233.58 (or 51% higher than the previous day’s close) reached a high of $300, before dropping to $151.40 in the afternoon and closing at $214.06.

• Since Tilray went public a couple of months ago, price increased over 1100% at one point today.

• Tilray was more valuable than 50% of the companies on the S&P 500 at one point today. It’s more valuable than Expedia, American Airlines, Snap, Dish Networks and Mylan and at one point today was worth more than Twitter.

• There are 90 MM shares outstanding. Roughly 75% of those outstanding shares are owned by Privateer Holdings Inc., a Seattle-based fund started seven years ago to focus on the marijuana business, which is backed by Peter Thiel.

NOTE: Peter Thiel is a PayPal co-founder and now billionaire investment capitalist whos Founders Fund, bought about $15 million to $20 million of dollars in bitcoin as reported by the Wall Street Journal in January.

• Tilray’s float is only 10 MM float…and here lies one of the issuses. The avg. volume as of late is 11 MM shares traded daily, but today it was 30 MM. Because the float is only 10 MM, each shared was bought/sold three times.

• 20% of the float was shorted.

Outstanding shares refer to the number of stocks that a company actually has issued. This number represents all the shares that can be bought and sold by the public.

The float represents company's shares that are freely bought and sold without restrictions by the public.

What we saw yesterday was just classic. The short sellers had to buy back their shares. In the process of buying back their shares, the stock price increased. The retail investors saw price rise more than 400% in two week and bought shares trying to make a quick buck. And those who had already bought shares more than two week ago said this price is crazy and placed limit orders to sell exactly at $300 on the cent. The price level than started an avalanche of selling. People stated to cash out for profits, but there were many trying to get out now for a loss and they didn’t care that the bid-ask spread was so wide, they just wanted out. Then you had the short sellers who had the capital to withstand the march to $300 now starting to buy back their shares for a profit down near $150, which is why the stock price closed at $204. Because this is a zero net sum game, many people lost a lot money, while many people made a lot of money today.

So what’s the lesson in all this? If one can’t stomach

stick to

ETFMG Alternative Harvest ETF, MJ is designed to measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational cannabis legalization initiatives. It’s the first and only U.S. ETF to target the cannabis/marijuana industry.

The top holdings of the EFT include:

This past week, price took out the previous high of $39.70 that was established in late January. I consider the price action a breakout, but over extended. The chart suggests when price pulls back to the weekly demand at $33, to go long. Although we have seen the highs in Tilray for quite some time, the cannabis industry is just beginning and great way to dilute risks is through an EFT such as MJ.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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Published on

by rollandthomas

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