A worker examines cannabis plants on a Tilray farm.
A group of marijuana stocks bounced back Thursday as the Reddit trading crowd continued to pile into the soaring names.
Tilray’s shares were up 13% in premarket trading Thursday, after rising about 150% this week. Aphria is up more than 11% in expanded trading, after up 57% this week. Aurora Cannabis is up nearly 14% in premarket trading after rallying nearly 50% since Monday.
Canopy growth is up 1% in early trading, which translates to a weekly profit of more than 20%. Sundial Growers is up 50% in premarket trading after a weekly gain of 160%.
Cannabis stocks are rising again on Thursday
The group of cannabis companies is attracting the attention of the same WallStreetBets Reddit army that contributed to the epic short squeeze on GameStop last month. The social media members posted news of their profits in the pot stocks and encouraged other traders to get involved on the way up.
“Here we go my! TLRY to the moon !!!” said a post on Thursday.
“Weedstocks, the new WSB darling,” said another post on Thursday.
Part of the discussion on Reddit centered on the upcoming Tilray / Aphria merger. Other social media users mention the facility’s federal decriminalization under the new administration.
The movement in pot stocks could also be related to high short interest rates, which measure how many traded stocks of a company are used for betting against the company. GameStop and AMC Entertainment have been targeted in part by retailers because their high interest in shorts made the stocks attractive candidates for what is known as a short squeeze. According to FactSet, Tilray’s short stake is 22.5% of the stocks available for trading.
However, some of these retail investors have held onto these stocks since their price movement in 2017 and 2018 and are optimistic about the newfound interest of other investors.
Several analysts looking at the cannabis companies told CNBC on Wednesday that price action this week has barely any fundamentals.
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