Can Reddit Stir the Weed Market? Tilray Stock Prices Say Yes
Remember the GameStop case? The company with stocks that rose over the roof because of Reddit users? Well, the same can happen to any other business, and recently, riding the Reddit wave is Tirlay — a Toronto-based cannabis company.
The Canadian Tilray Inc. (NASDAQ: TLRY), who merged with Aphria in May, saw a staggering rise (130% this year) in its stock price because of the Reddit talk.
So, what’s behind the Reddit-ors’ sudden affection for Tilray?
The Reddit army noticed that short-seller investors are targeting Tilray to lower the price of Tilray’s stocks.
Namely, short-sellers are investors that borrow stocks to sell to influence the stock market price of a company. They have every intention to repurchase their stocks for a lower price — in fact, they are obliged to do it or face significant losses.
What Redditors do is buy the stocks in the meantime and in that way “squeeze“ investors to lose large sums to buy stocks back.
But why help the company beat short-sellers?
Experts say that many factors are at play. First, after merging with Aphria, Tilray became bigger, cheaper, and better, much to the likes of the WallStreetBets Reddit army.
Some of them even see potential in Tilray as a meme stock. In addition, there’s the push for the federal legalization of cannabis, plus the public acknowledgment of Redditor’s support of the Tilray CEO Irwin Simon.
That said, the experienced investors tried to counter the Tilray stock shock by pushing it down. However, the Reddit crowd isn’t backing down.
Tilray stocks also rose amidst the corona outbreak. Still, the company entered a turbulent period followed by a need to reduce workforce together with other companies like Aurora Cannabis, Hexo Corp, and Sundial Growers Inc.
In 2019, Tilray was 4th on the list of top cannabis companies 2019, and with this Reddit support, it has the potential to excel to the top.