A worker examines cannabis plants on a Tilray farm.
Source: Tilray
A group of cannabis stocks is bouncing again on Thursday, while the crowd of Reddit negotiators continues to pile up on big names.
Tilray’s shares rose 13% in pre-market trading on Thursday, after rising about 150% this week. Aphria rose more than 11% in extended trade, after a 57% gain this week. Aurora Cannabis rose almost 14% in the pre-market, after rising almost 50% since Monday.
Canopy’s growth increased 1% at the beginning of trading, bringing its weekly earnings to more than 20%. Sundial Growers rose 50% in the pre-market, after a weekly gain of 160%.
Cannabis stocks increase again on Thursday
The group of cannabis companies is attracting the attention of the same army of Reddit WallStreetBets that contributed to the epic squeeze on GameStop last month. Social media members have been posting messages about their profits on pot stocks and encouraging other dealers to join them on the rise.
“Here we go man! TLRY to the mooon !!!”, said a post on Thursday.
“Weedstocks, the new darling of the WSB,” said another post on Thursday.
Part of the discussion on Reddit revolved around the pending merger between Tilray and Aphria. Other social media users are mentioning decriminalizing the plant at the federal level under the new administration.
The movement in the shares of the pot can also be related to high short interest rates, which measure how many shares traded by a company are being used in bets against the company. GameStop and AMC Entertainment were targeted by retail traders in part because their high overdraft interest made candidate shares attractive for so-called short squeeze. Tilray’s sold stake equals 22.5% of the shares available for trading, according to FactSet.
To be sure, some of these retail investors have held these shares since the price movement in 2017 and 2018 and are expressing optimism about the newly discovered interest of other investors.
Several analysts covering cannabis companies told CNBC on Wednesday that this week’s price action has little basis on the fundamentals.
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