Tilray rockets higher as Reddit turns to cannabis stocks, crypto market cools down led by BTC
By John Shepard
10:00, 11 February 2021
Canadian company Tilray, Inc. (TLRY) blasted 50 per cent higher on Wednesday after the WallStreetBets Reddit group turned its attention to cannabis stocks. After the short squeeze of GameStop (GME), the amateur investors were now bullish on Tilray and also Aphria Inc (APHA), with which the company is set to merge. Tilray was up $21.56 to close at $63.91, while Aphria was up $2.55 to $26.30.
In the meantime, Bitcoin (BTC) and the overall cryptocurrency market cooled after the early week surge, while Dogecoin (DOGE) added another 6 per cent on the day.
Reddit traders target Tilray short pile
The WallStreetBets forum was moving into cannabis stocks this week, leading to a surge in Tilray and its acquisition target Aphria. The former has one of the short interest positions in the sector and this was one of the reasons that GameStop’s move was so explosive.
Investors are also turning their attention to the arbitrage opportunity in Aphria, which sees its stock trading at a discount to Tilray. Under the terms of the recent merger deal between the companies, Aphria investors were set to receive 0.8381 shares of Tilray stock. As Tilray surges higher, APHA has to follow and investors are looking to close the gap.
The move on Wednesday will get the attention of the market again and we could see follow-through into the weekend. The Reddit forum will be hoping that it doesn’t also get the attention of regulators.
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Bitcoin cools but will Twitter buy?
Bitcoin was lower by 3 per cent on Wednesday after the big rally on news that Tesla (TSLA) had invested $1.5bn in the digital coin. The coins that followed BTC higher have also paused but Dogecoin is in the green with a 6 per cent gain.
The latest news is that Twitter may be the next corporation to move into BTC. The company’s chief financial officer Ned Segal told CNBC’s Squawk Box that the social media firm is considering its options.
Segal told CNBC’s Squawk Box on Wednesday that the social media giant is also looking at payment options involving the top cryptocurrency by market cap.
“We have done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in Bitcoin, how we might pay a vendor if they asked to be paid in Bitcoin and whether we need to have Bitcoin on our balance sheet,” Segal said.
The CFO added that his financial team watches what other companies are doing with this technology in order to see where it might fit for Twitter.
The move by Tesla was a big seal of approval for Bitcoin and other companies are now sitting up and taking notice.
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