Now Reddit amateur traders are buying cannabis

Now Reddit amateur traders are buying cannabis

Investments encouraged by democratic politics in favor of decriminalization but someone also wants to repeat the short squeeze that led the maneuvers on Gamestop

(photo: Norman Posselt / Getty Images) A ​​whole new wave of memes and screenshots is raising r / wallstreetbets latest craze: cannabis. Two so-called "grass stocks" outperformed on Wednesday on Nasdaq: Canada's Tilray (+ 50.91%) and Aphria (+ 10.74%), which in December announced a merger to create the largest company in the industry. world. In addition to the prospects of the new entity, the redditors see the possibility of yet another short squeeze, and are encouraged by the legalization in several states as well as the promise of the Democrats to decriminalize at the federal level, law firm in the Senate. This forecast is pushing the entire sector on the lists.

While a series of posts with presumed stellar earnings ("500k", "+ 1100%") floods the subreddit of amateur traders again , someone hastens to explain that "the weed has nothing to do with GameStop, it is not a maneuver orchestrated by Wall Street to distract from Gme" (a title that meanwhile has settled on $ 50 per share), writes a user of the forum. “Quite simply, people are grabbing stocks now, with a view to potential explosive growth. Also, many of these shares were short sold and are now being squeezed. In the case of Tilray 22.5%, reports Cnbc. And this stock has gained 400% since the agreement with Aphria was announced in December, which in turn has grown by 243%, according to Reuters. The pro forma equity value of the new merged company would be $ 3.9 billion, with revenues of $ 685 million.

If the Biden administration were to keep its commitments, the cannabis sector will be able to access more traditional methods of credit and also be attractive to institutional investors. For this reason, yesterday other stocks continued their growth that has lasted for at least twelve months: Canopy Growth recorded + 6% (+ 110% in one year), Aurora Cannabis + 20% (+ 120% in one year), Etfmg + 4.31% (it has doubled its value since the presidential election).

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