Sep 20, 2018

Tilray's valuation has gone insane

Data: FactSet; CHART: Naema Ahmed/Axios

Marijuana company Tilray, which IPO'd in July at $17 per share, had a truly wild stock-market ride on Wednesday, one day after announcing that it's being allowed to import marijuana from Canada into the U.S. for clinical trials.

Why it matters: Tilray is the only pure-play marijuana company traded in New York (the others are all in Toronto), and has become a speculative vehicle, with a valuation divorced from any conceivable reality.

The big picture: Tilray currently has a market capitalization in the $20 billion range, although it's anybody's guess where it will trade today, or tomorrow. It has $54 million of assets, $17 million in negative free cashflow, and its main product is a highly-taxed commodity with ultra-thin margins and chronic oversupply.

Still, it's a day-trader's delight. On Tuesday, Tilray closed at $155 per share. On Wednesday, it rose as high as $300 per share, before falling by $37 per share within two minutes.

That was enough to get Tilray halted for extreme volatility. When it reopened, it immediately fell another $37, bounced around, got halted again, fell further, got halted a third time, and fell even more — to a low of $151 per share — before rallying by $66 in four minutes to close at $218, up about 40% on the day.

  • Total volume was just shy of $7 billion, with more than 31 million shares trading hands. (The free float, or number of shares available to trade, is less than 18 million shares.)

Be smart: The wisdom of crowds does not apply to cannabis company market capitalizations. What you're seeing here is something between a bubble and a random number generator. Touch these stocks only if you love to gamble.

Go deeper

Illinois governor pardons 11,000 pot convictions ahead of Jan. 1 legalization

Illinois Governor JB Pritzker on Dec. 3, 2018. Photo: Paul Natkin/Getty Images

Illinois Gov. JB Pritzker granted more than 11,000 pardons on Tuesday for minor, non-violent marijuana offenses, as the state prepares to legalize the drug on Jan. 1, AP reports.

The big picture: Illinois on Wednesday will become the 11th state to allow people 21 or older to buy and consume marijuana. State officials estimate that 116,000 people who were convicted for possessing 30 grams or less of marijuana are eligible for pardons.

Go deeperArrowDec 31, 2019

Tesla short sellers wish Elon Musk had funding secured at $420

Data: Money.net; Chart: Axios Visuals

Tesla has been among the most derided companies in the world, but CEO Elon Musk has been getting revenge against hated short sellers since the electric car company's June swoon.

Why it matters: Many probably wish Musk had taken the company private at $420 a share, as he said he would in an August 2018 tweet in which he claimed to have "funding secured" for the move.

Go deeperArrowJan 14, 2020

2019 stock market gains still leave Trump behind his predecessors

Data: FactSet; Chart: Axios Visuals

The S&P 500 has jumped 42% under President Trump — according to market data from the inauguration through 2019's final day of trading.

Why it matters: Trump uses the stock market's surge as a barometer of his presidency's success — one that, along with the 50-year low unemployment rate, he's sure to continue to tout as the 2020 election approaches — but the gains under him lag those under former Presidents Barack Obama, when stocks rebounded from the lows of the financial crisis, and George H.W. Bush.