{"id":106813,"date":"2021-02-11T13:21:06","date_gmt":"2021-02-11T13:21:06","guid":{"rendered":"https:\/\/fin2me.com\/?p=106813"},"modified":"2021-02-11T13:21:06","modified_gmt":"2021-02-11T13:21:06","slug":"betting-on-biden-reddit-fuels-fresh-surge-in-cannabis-stocks","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/betting-on-biden-reddit-fuels-fresh-surge-in-cannabis-stocks\/","title":{"rendered":"Betting on Biden? Reddit fuels fresh surge in cannabis stocks"},"content":{"rendered":"

(Reuters) – Shares in North American cannabis firms were heading for new highs on Thursday, with Reddit-inspired retail investors betting they could beat the short-sellers and benefit from lighter regulation of the sector under U.S. President Joe Biden.<\/p>

FILE PHOTO: Cannabis plants grow inside the Tilray factory hothouse in Cantanhede, Portugal April 24, 2019. REUTERS\/Rafael Marchante<\/figcaption>

U.S.-listed Tilray and Sundial Growers, which surged more than 50% each in the previous session, were up 14% and 50% respectively in U.S. premarket trading, as European retail investors piled in to the rally.<\/p>\n

Participants on the WallStreetBets forum on Reddit, which inspired a price spike in GameStop earlier this year that squeezed out Wall Street short-sellers who had bet on a price fall, have turned attention to U.S. and Canadian cannabis firms.<\/p>\n

\u201cThe involvement of Reddit means a frenzy is the right word,\u201d said Jasper Lawler, head of research at London Capital Group in London.<\/p>\n

\u201cI\u2019m splitting the outlook in two. Reddit targeting a short-squeeze in Tilray means a quick pump and dump,\u201d he said, while others looked longer-term amid prospects for lighter regulation of the sector under Biden and his Democrat allies in Congress.<\/p>\n

Swaggystocks, which aggregates sentiment on shares discussed on the WallStreetBets forum which has about 8 million participants, showed Sundial and Tilray were the most \u201cupvoted\u201d, or highly touted, stocks.<\/p>\n

Short interest in Tilray, measuring the number of shares borrowed by short sellers betting on a price fall, was about 37% on Wednesday compared to 27% at the end of January, financial analytics firm Ortex said.<\/p>\n

Short-sellers borrow stocks and sell them on, aiming to buy them back later more cheaply and pocket the difference. If the shares move up instead, they face a \u2018short squeeze\u2019 as they race to buy the stock to close out their positions to stem losses.<\/p>\n

Tilray was the most traded stock on German trading platform Lang & Schwarz with more than 2.4 million euros in turnover by 1116 GMT, well ahead of major German stocks such as Volkswagen and Deutsche Bank.<\/p>\n

Other pot stocks, Sundial Growers and Aurora Cannabis, were also among the most active on the platform, reflecting high retail interest, traders said.<\/p>\n

\u201cIt\u2019s the Reddit army and friends,\u201d said Stefan de Schutter, portfolio manager and Alpha Trading in Frankfurt.<\/p>\n

Tilray jumped more than 50% on Wednesday, while U.S.-listed Sundial and Toronto-listed Aurora surged 78% and 21% respectively.<\/p>\n

A search for Tilray showed up 217 posts on eToro, an Israeli trading platform seen as an alternative in Europe to popular U.S. retail platforms such as Robinhood.<\/p>\n

One eToro user in Germany, @ChrisBro14, wrote in a thread about Tilray as it traded around $70: \u201cGuess will go to $100. Where do you have TP limit. What do you think it will (do)?\u201d<\/p>\n

Interest in the sector lifted cannabis-focused exchange traded funds (ETFs) to new highs, with some more than doubling in value over the past month.<\/p>\n

Graphics: Cannabis ETFs –<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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