Canadian marijuana grower Tilray (NASDAQ:TLRY) is the latest pot stock to come under attack from short-seller Andrew Left’s Citron Research, which has changed its position and is now shorting the stock.
Declaring that retail investors have gone mad and are forgetting that Tilray went public at just US$17 in July, Left and his team are now taking a short bet against the stock.
Now trading at about US$74.47, Tilray is more expensive than its rival Canopy Growth, which now trades at US$49.94, despite its lack of a beverage deal, its lower capacity and falling behind in its funding, according to Left.
Citron LOVED $TLRY at $26 but now we are SHORTING stock. Cowen lowered est and still raised tgt $62 only shows "RETAIL INVESTORS GONE MAD" and forgot $TLRY went public at $17 - 6 weeks ago. We would expect an equity raise at these levels. By far most expensive in space.
— Citron Research (@CitronResearch) September 4, 2018
Left’s abrupt shift in sentiment comes weeks after he was making bullish calls on Tilray and saying it could be the next marijuana company to get a “white knight at a premium to market” in the wake of the move by Constellation Brands Inc to invest US$4bn in its rival Canopy Growth (NYSE:CGC, TSX:WEED).
Read: Andrew Left puts money on Tilray in wake of Constellation's US$4bn investment in rival Canopy Growth
His outcry over Tilray also comes days after Left and his team went after the Canadian cannabis group Cronos Group Inc (NASDAQ:CRON) in a scathing report and declared it the “most overhyped” of all the pot stocks.
In its biggest attack, Citron alleged that Cronos was failing to reveal key details about the size of its distribution agreements with the Canadian provinces. Sources told Citron that the reason for Cronos’s lack of transparency is that its distribution agreements are “so small they could never justify the premium investors are paying for the stock.”
Read: Cronos Group besieged by short-seller Andrew Left's Citron Research, shares fall and end sharply up Friday
Canadian pot stocks have generated considerable interest in the markets ahead of Canada’s move to legalize all forms of marijuana on October 17.
Left’s recent comments have had little lasting impact on the direction of shares of both Tilray and Cronos. Tilray shares traded nearly 15% higher Tuesday at US$74.75 while Cronos shares rose 12.3% to US$11.10.