WATCH: It’s been a roller coaster ride for shareholders of Nanaimo based medical cannabis producer Tilray. On Wednesday, the company’s stock price soared by 38 per cent. That’s on top of a 600 per cent increase in the last month. Tilray’s shares are so volatile, NASDAQ halted trading in the company five times today. Kendall Hanson now with what’s been sending Tilray stocks higher and higher.
Medical cannabis producer Tilray has grown into one of Nanaimo’s biggest businesses.
The company is supplying customers around the world but now the company’s stock price is making the news.
Tilray’s CEO was interviewed on major American networks adding to the share price hype.
“All the alcohol companies need to enter this industry,” said Brendan Kennedy, Tilray’s CEO, in an interview on CNBC.
“It’s a great hedge for them. Whether you’re an alcohol company or an investor in an alcohol company. It’s a global opportunity. Our intent is to build a company that dominates part of this $150 billion industry.”
The company’s stock has jumped nearly 600 per cent in the past month. Tilray hit a high today of nearly $300 before settling at $214. Two months ago shares were only worth $22.
“They have about 76 million shares out there but only 10 million shares are available for trading at any given time,” said David LeNeveu, an investment advisor with Hinkkala & Associates. “There’s a huge backlog of buyers and there are not very many sellers so it really boils down to supply and demand.”
LeNeveu says there are several factors contributing to Tilray’s meteoric stock price, including a bet by many traders that the stock was about to plunge.
“They’re betting that it was going to go down,” said LeNeveu. “So as it goes up they need to sell it in order to reduce their loss and as more short sellers sell and sell and sell counterintuitively it causes that stock price to rise.”
David Leneveu says while it’s great to see a hometown company succeed he also believes cannabis stocks are being driven up by pure speculation. A situation in which investors could see their money going up in smoke.