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Tilray, Inc. was incorporated in 2018 in Canada and researches, cultivates, processes, and distributes medical cannabis. Tilray is a global company and sells its products in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, New Zealand, and South Africa.
Tilray was the first Canadian-based marijuana stock to go public on a US exchange (Nasdaq), was one of the first medical cannabis companies in Canada to be issued a cultivation license and will be one of the main recipients to benefit when Canada opened its recreational-marijuana market.
In 2018, shares of Tilray, went from $17 per share in July to just over $300 in August, an increase of more than 600%. Tilray was more valuable than 50% of the companies on the S&P 500. Because the float at the time was only 10 MM, people wanted in and drove the price of the stock to $300/share.
NOTE: Tilray’s float at the time was 10 MM float. The avg. volume at the time was 11 MM shares traded daily, but a particular day, it was 30 MM. Because the float was only 10 MM, each share was bought/sold three times.
Tilray once had a market cap over $10 billion, but with only sales of $28 million short sellers saw an opportunity. People came to their senses and because 20% of the float was short the stock, Tilray came crashing down 90%.
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The trading frenzy in shares of GameStop and now AMC Entertainment looks familiar to Tilray CEO Brendan Kennedy.
“I’ve had a little bit of PTSD over the last couple of days,” Kennedy said Wednesday on CNBC’s “Squawk on the Street.” “I remember getting five different calls from Nasdaq in a single day about our stock being halted because the short sellers were being squeezed so badly.”
“My advice to those CEOs would be that, at times like this, your company is not your stock and your stock is not your company,” he said. “Keep it all in perspective as these very unusual market dynamics are taking place.”
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<center><a href="https://www.cnbc.com/2021/01/27/tilray-ceo-brendan-kennedy-issues-a-warning-to-gamestop-amc-bosses.html">Source</a></center>
Last year, COVID forced AMC to raise capital to stay afloat after tick sales crashed by more 80%. After several false starts due to COVID-19 cases increasing last Summer throughout the U.S., AMC theaters opened up again on Aug. 2oth. AMC promoted the reopening as "Movies in 2020 at 1920 Prices." But reality quickly settled in as the movie traffic failed to materialize.
On Wednesday, AMC Entertainment Holdings raised over $300 million by selling shares at an avg. price of $4.81. However, had they waited a couple of hours later as shares approached $20, they would have raised $1.26 billion instead.
I understand what Kennedy of Tilray is saying, but in actuality, no public CEO has control over the price of their company stock…the Markets dictate where a stock price is headed. In addition, regardless of market dynamics, a CEO is paid to run the business whether it’s sunny or raining outside.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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