A group of cannabis stocks are jumping again on Thursday as the Reddit trading crowd continues to pile into the high flying names.
Shares of Tilray are up 13% in premarket trading on Thursday, after rallying about 150% this week. Aphria is up more than 11% in extended trading, following a 57% gain this week. Aurora Cannabis is up nearly 14% in premarket trading after a nearly 50% rally since Monday. Canopy Growth is up 1% in early trading, bringing its weekly gain to more than 20%. Sundial Growers is up 50% in premarket trading after a weekly gain of 160%.
Cannabis stocks surge again on Thursday
The group of cannabis companies are garnering attention from the same WallStreetBets Reddit army that contributed to the epic short squeeze in GameStop last month. The social media members have been posting messages about their profits in the pot stocks as encouraging other traders to join in on the way up.
"Here we go my! TLRY to the mooon!!!," one post said.
"Weedstocks, the new WSB darling," another post said.
The move in pot stocks could also be related to high short interest ratios, which measure how many of a company's traded shares are being used in bets against the company. GameStop and AMC Entertainment were targeted by retail traders in part because their high short interest made the stocks attractive candidates for a so-called short squeeze. Tilray's short interest is equal to 22.5% of the shares available for trading, according to FactSet.
To be sure, some of these retail investors have been holding onto these stocks since their price action in 2017 and 2018 and are expressing optimism about the newfound interest from other investors.
Part of the discussion on Reddit has centered around the pending merger between Tilray and Aphria. Other social media users are mentioning the decriminalization of the plant on the federal level under the new adminstration.
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Source: cnbc.com