What are these short sellers smoking? 💨


(Tommy Lowe) #1

So cannabis stocks have been soaring lately with the increased legalisation and relaxed regulations, with Canadian company Tilray flying since their July IPO (Edit - up over 1000%), with that in mind it was interesting (although not especially surprising) to read that shorts have increased 44% since the end of Q2, despite paying between 20-40% in borrow fees, and losing $490 million so far this year. Tilray are currently the most popular pick for the shorts right now given their extreme rise in advance of the Canadian legalisation of weed next month.

What do you think? Would you say the market has been growing too quickly and is due a wake (n bake) up call, or do you see it only getting bigger as more states/countries follow suit? I still think there is a huge amount of growth to come from the sector.


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(Aris David) #2

Borrow fees are 400% at interactive brokers… that’s more than 1% a day.

Anyway, these same short sellers are the ones causing it to rally hard, they panic cover their shorts (buy to cover) due to high daily borrow rates causing it to go up even more. It’s close to unsustainable level now, they’ll eventually get it right. It’s a classic case of, “Markets can remain irrational longer than you can remain solvent”


#3

Think there’s still huge growth still. Read something about Coca-Cola :wink:

Are the banks now accepting their money?


(Tommy Lowe) #4

Forbes reported that 411 banks are opening accounts for them now, so it looks like they can stop stuffing it in their mattresses


#5

Them mattresses would have been cushty though :joy:


(Tommy Lowe) #6


(Alex Sherwood) #7

Alphaville makes a pretty good argument that Tilray’s overvalued at this point -

https://ftalphaville.ft.com/2018/09/19/1537362836000/Tilray-is-nuts--When-s-the-crash-/

I hope for the sake of everyone that’s piled in, anticipating an acquisition by Coca-Cola, they the acquisition actually happens :sweat_smile:


#8

A glance at Tilray’s chart makes me think a large correction must surely be in the post… that looks like a crypto in 2017 or a dotcom in 1999 to me.

Related: “Trading stocks in 2018 feels like a video game”, via this.


(Tommy Lowe) #9


#10

Tilray yesterday: up ~90%, then all the back, then up 40%.
https://www.bloomberg.com/news/articles/2018-09-19/tilray-keeps-rising-post-market-following-ceo-s-cnbc-interview


(Tommy Lowe) #11

“The new Crypto” is the tweet of choice I’m noticing…


(Emma) #12

Waiting for the markets to open, it’s going to be interesting to see what happens today


(Tommy Lowe) #13

We’re off to the races. +10% already. Watch it hit $250 then tumble.


(Alex Sherwood) #14

(Chris) #15

Looks like some have seen their profits go…

…up in smoke


(Emma) #16

image https://media0.giphy.com/media/hVeqoUkk5pNKg/giphy.gif


(Emma) #17


(Tommy Lowe) #18

High of 244, I was close! :joy:


#19

Fuel to the fire…