Tilray jumps after $166 million deal for stake in MedMen to step into the US retail cannabis market

MedMen
MedMen store employees serve customers buying marijuana in West Hollywood, California.

  • Tilray surged early Wednesday after reaching a $165.8 million investment deal with MedMen.
  • Tilray is investing in MedMen to position itself into the US retail market for cannabis should it be legalized on the federal level.
  • The Canadian company is making the investment through acquiring convertible notes and warrants.
  • See more stories on Insider’s business page.

Tilray shares surged by nearly 10% early Wednesday after the Canadian cannabis cultivator and distributor said it has invested in MedMen to position itself in the US retail market if and when cannabis is legalized on the federal level.

Shares of Tilray gained as much as 9.5% to $14.36 during premarket trade then trimmed the advance to 7.5%. The stock this year has gained about 59% through Tuesday’s session. In May, Tilray completed its merger with Aphria.

Tilray along with other investors in a newly formed limited partnership bought 75% of MedMen’s outstanding senior secured convertible notes originally held by private equity firm Gotham Green Partners, and 65% of outstanding warrants for $165.8 million.

MenMed runs more than 25 stores in six states, including California, the biggest market worldwide. Tilray called MedMen one of the most recognized brands in the $80 billion US cannabis market.

“Backed by accelerating trends towards legalization globally, we are focused on building the world’s leading cannabis-focused consumer branded company with a goal of $4 billion of revenue by the end of our fiscal 2024,” said Irwin Simon, Tilray’s chairman and CEO, in a statement.

The MedMen investment “is a critical step towards delivering on our objective as we work to enable Tilray to lead the US market when legalization allows,” he said.

Tilray said it will issue 9 million shares of its common stock to Gotham Green Partners pending approval by shareholders. A special shareholders meeting will be held on Thursday. If Tilray hasn’t received shareholder approval by Dec. 1, Gotham Green Partners may receive cash rather than Tilray shares.

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Retail traders are cheering on Tilray’s 27% pop after the cannabis company’s first earnings report since merging with Aphria

Tilray marijuana
  • Retail traders are cheering on Tilray’s 27% stock pop on Wednesday after the cannabis company turned in its first earnings report since merging with Aphria.
  • A Wall Street Bets post highlighted that the cannabis company increased EBITDA 285% year over year.
  • Tilray is far from it’s 2018 all-time highs but many retail traders seem optimistic the stock will rally “to the moon.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Retail investors on Wednesday cheered Tilray’s 27% single-day stock pop after the cannabis company recorded its first quarter of earnings after merging with Aphria.

The Toronto, Ontario-based firm jumped to an intraday high of $16.18 Wednesday, the highest point in over two weeks, but still well below its post-IPO record of $300 in 2018.

“$TLRY this is going back to $150. Buy and hold!” one user said in Stocktwits. Another commented that the stock had potential to be “life-changing.” Tilray was trending #1 on Stocktwits Wednesday morning.

The cannabis company posted net income of $33.6 million for the fiscal fourth quarter, compared to a loss of $84.3 million from the prior year. EBITDA nearly quadrupled to hit $12.3 million.

“Still down bad but we’re getting there. To the moon boyz!” one Reddit user commented on a WallStreetBet’s post highlighting the company’s 285% yoy adjusted EBITDA increase.

Tilray’s stock has fallen roughly 5% since it completed its merger with Aphria in May, but the company said it has already benefited from millions of dollars in cost savings from the combination.

“In a very short period of time since our business combination was finalized, we transformed and strengthened Tilray, delivered solid results amid continued COVID-19 lockdowns and restrictions and achieved $35 million in synergies to date – well on our way to delivering $80 million in cost savings over the next 16 months,” said Tilray CEO Irwin D. Simon.

Read more: These 5 stocks offer the most potential for a short squeeze this week for retail investors, according to Fintel

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From Tesla to Workhorse, here are the 50 most popular stocks among retail investors on Robinhood

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Robinhood is hugely popular among day traders, putting it at the center of the GameStop frenzy

Robinhood has been the poster child of the commission-free trading movement that has drawn a new generation of investors into the stock market, and its user base skews heavily to Millennial and Gen Z investors. From iconic companies like Apple, to upstarts looking to disrupt whole industries, here are the top 50 stock picks among Robinhood users.

50. Workhorse

Workhorse Truck
Workhorse

Workhorse, the Loveland, Ohio-based electric-vehicle maker, has become a retail favorite among other auto manufacturers, like Lordstown Motors and Canoo.

49. Boeing

Inside the cockpit of Boeing 757 testbed aircraft - Honeywell Aerospace Boeing 757 testbed aircraft
Thomas Pallini/Insider

Shares of the plane-maker have rallied more than 12% so far this year.

48. Zynga

Zynga Peak
Rafael Henrique/SOPA Images/LightRocket via Getty Images

The mobile-gaming company sees more than $1 billion in sales opportunity if it expands beyond mobile games to consoles and computers, Bloomberg reported.

47. Uber

Uber
Photo by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Shares of the San Francisco-based ride-hailing company have been barely changed so far this year.

46. United Airlines

Flying United Airlines during pandemic
Thomas Pallini/Insider

The airline slumped amid the COVID-19 pandemic but has turned around as air travel picks back up.

45. SPDR S&P 500 ETF

A number of value stocks have been surging on the S&P 500 in 2021.
Kena Betancur/VIEWpress

The ETF tracking the benchmark index has risen about 15% so far this year.

44. NVIDIA

nvidia impressive ceos 2x1
Jensen Huang, CEO of Nvidia. Nvidia; Skye Gould/Insider

The chip and graphics card producer has rallied more than 50% year-to-date.

43. General Motors

General Motors headquarters Detroit
Paul Hennessy/SOPA Images/LightRocket via Getty Images

The automaker is among a slew of others in the industry that retail traders have rallied behind.

42. Coca-Cola

Coca-cola billboard
Peter Macdiarmid/Reuters

Shares of the Atlanta-based beverage company have rebounded from a slump earlier this year.

41. Vanguard S&P 500 ETF

Vanguard vs Fidelity
MoMo Productions

The exchange-traded fund has rallied 14% so far this year.

40. Norwegian Cruise Line

The Norwegian Prima cruise ship
Norwegian Cruise Line

The cruise industry was hit hard amid the COVID-19 pandemic, but shares of cruise operators are on the rebound as the world reopens.

39. Ideanomics

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P. Steeger/Getty Images

Ideanomics, a small company focused on sustainability, has rallied alongside other meme stocks like GameStop this year.

38. Virgin Galactic

Virgin Galactic
Virgin Galactic

The space tourism company has been a focus among Reddit retail traders for months. Shares soared in May after the company announced its successful test flight.

37. FuelCell Energy

fuel cell
REUTERS/Hugh Gentry

The Danbury, Connecticut-based company creates “clean, efficient and affordable fuel cell solutions,” according to its website.

36. AT&T

AT&T
Brendan McDermid/Reuters

The media and telecommunications company based in Dallas is among retail-trader favorites on Robinhood.

35. Moderna

woman getting vaccine
A physician injects someone with the Moderna Covid-19 vaccine. MediaNews Group/Boston Herald via Getty Images

Moderna shares have rallied in recent days since the pharmaceutical company announced its COVID-19 vaccine should work against the Delta variant.

34. Starbucks

A Starbucks barista makes coffee in Florida.
Jeffrey Greenberg/Universal Images Group via Getty Images

The popular Seattle-based coffee maker recently added oat milk-based drinks to its menu.

33. Twitter

Twitter logo over computer
NurPhoto/Getty Images

The social-media site has been a hub for retail traders exchanging ideas this year.

32. Advanced Micro Devices

austin amd
Jack Plunkett/AP

Advanced Micro Devices, a semiconductor company, is frequently mentioned on Reddit investing threads like Wall Street Bets.

31. Canopy Growth

canopy growth
REUTERS/Chris Wattie

The Canadian cannabis company is one of a handful of its kind that are among retail-trader favorites.

30. Facebook

facebook logo
Getty

The social media behemoth is now worth more than $1 trillion after a federal judge dismissed antitrust lawsuits against the company.

29. Tilray

Tilray marijuana
Tilray

The Canadian cannabis company has seen a lot of Reddit hype as retail investors look to position themselves for the possibility of legalization in the US.

28. Coinbase Global

The photo shows physical imitations of cryptocurrency
INA FASSBENDER/AFP via Getty Images

Coinbase was the first major cryptocurrency exchange to go public on April 14.

27. Bank of America

BofA logo
Carlo Allegri/Reuters

Shares of the Charlotte, North Carolina-based bank have rallied about 36% so far this year.

26. OrganiGram

weed thc marijuana cbd cannabis
Olena Ruban/Getty Images

The Canadian cannabis company is one of several retail traders have hyped up.

25. Alibaba

alibaba jack ma NYSE
Alibaba went public on the NYSE in 2014. Andrew Burton/Getty Images

Shares of the Chinese e-commerce company have fallen about 2.6% this year.

24. Netflix

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Photo Illustration by Chesnot/Getty Images

The streaming site recently launched an e-commerce store to sell items from popular shows like “The Witcher.”

23. Snap Inc.

Snapchat messaging application.JPG
REUTERS/Thomas White

Shares of the social site have rallied about 35% so far this year.

22. Delta Airlines

Delta Air Lines Airbus A320
A Delta Air Lines Airbus A320. Philip Pilosian/Shutterstock.com

The airline is among several others that struggled during the pandemic but has begun to rebound.

21. Churchill Capital Corp IV

money
Boonchai Wedmakawand/Getty Images

Shares of the special-purpose acquisition company have nearly tripled in price since going public earlier this year.

20. Palantir

Alex Karp - CEO of Palantir Alex Karp speaks to the press as he leaves the Elysee Palace in Paris, on May 23, 2018 after the "Tech for Good" summit, in Paris, France, on May 23, 2018.
Palantir CEO Alex Karp. Photo by Julien Mattia/NurPhoto via Getty Images

Palantir CEO Alex Karp said the surveillance company is a favorite stock pick because the company respects the intelligence of the retail-trading community.

19. GoPro

GoPro Inc's founder and CEO Nick Woodman holds a GoPro camera in his mouth as he celebrates GoPro Inc's IPO at the Nasdaq Market Site in New York City, June 26, 2014.  REUTERS/Mike Segar
GoPro Inc’s founder and CEO Woodman holds a GoPro camera in his mouth as he celebrates GoPro Inc’s IPO at the Nasdaq Market Site in New York City. Thomson Reuters

The maker of wearable cameras has rallied 38% so far this year.

18. Zomedica

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Westend61/Getty Images

The Ann Arbor, Michigan-based company is focused on helping meet the needs of veterinarians, according to its website.

17. GameStop

gamestop store
John Minchillo/AP

GameStop was recently added to the Russell 1000 Index, a list of the largest companies based on market capitalization, thanks to its epic rally pushed by retail investors.

16. Carnival

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Sam Greenwood/Getty Images

The cruise line industry shuttered amid the COVID-19 pandemic, but operators like Carnival are making a comeback as the pandemic recedes.

15. Aurora Cannabis

Aurora Cannabis
Alberta Cannabis Inc/Handout via REUTERS

Aurora is another Canadia cannabis company that retail traders have flocked to amid excitement over potential legalization in the US.

14. Pfizer

pfizer vaccine us
Irfan Khan / Los Angeles Times via Getty Images

The pharmaceutical company has surged in popularity, largely thanks to the production of its COVID-19 vaccine.

13. Nokia

FILE PHOTO: Visitors gather outside the Nokia booth at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez/File Photo
Reuters

Nokia has been looped into the basket of meme-stocks, like GameStop and AMC, that have gripped retail-traders attention this year.

12. Plug Power

Saudi Aramco hydrogen fueling station
Photo by Wang Haizhou/Xinhua via Getty Images

Plug Power, based in Latham, New York, is focused on creating hydrogen fuel cells to power vehicles.

11. American Airlines

American Airlines tails
American Airlines’ planes parked at a gate in Washington. Joshua Roberts/Reuters

The Fort Worth, Texas-based airline has rallied about 35% year-to-date.

10. Amazon

amazon warehouse truck shipping
ANGELA WEISS/AFP via Getty Images

The e-commerce giant is among the biggest companies in the world with a $1.7 trillion market capitalization.

9. Microsoft

Satya Nadella
Satya Nadella is the CEO of Microsoft. Sean Gallup: Getty Images

Microsoft is among the largest companies in the world with a $2 trillion market capitalization.

8. Disney

Disney World
The Cinderella Castle at Walt Disney World, Florida. Roberto Machado Noa / LightRocket via Getty Images

Shares of the media and entertainment conglomerate have dropped about 3% so far this year.

7. NIO

Nio
STR/AFP via Getty Images

The Chinese electric-vehicle maker has rallied more than 600% in the past year.

6. General Electric

GE.
General Electric reports strong earnings. Hussein Faleh/Getty Images

Shares of the long-time company have been on the rise this year, rallying about 25%.

5. Ford

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President Joe Biden drives the new electric Ford F-150 lightning at the Ford Dearborn Development Center in Dearborn, Michigan on May 18, 2021. Nicholas Kamm/Associated Press

The legacy automaker garnered attention earlier this year when President Joe Biden floored one of its electric trucks.

4. Sundial Growers

Marijuana Cannabis
AP Photo/Steven Senne, File

Sundial, among other Canadian cannabis companies, is a favorite among retail traders.

3. AMC Entertainment

AMC stock
Igor Golovniov/SOPA Images/LightRocket via Getty Images

AMC Entertainment became a retail-trader favorite earlier this year, and led a rally in memes last month amid renewed interest in meme stocks.

2. Apple

Apple CEO Tim Cook
Apple CEO Tim Cook. Karl Mondon/Digital First Media/The Mercury News via Getty Images

The iPhone maker is the most valuable company in the world with a market cap of more than $2 trillion.

1. Tesla

Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.
Tesla CEO Elon Musk. Frederic J. Brown/AFP via Getty Images

Tesla’s Chief Executive Officer Elon Musk has captured retail-trader attention in both his company and in the realm of cryptocurrencies.

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A rotation into cannabis stocks by retail investors has a lot more room to run as the latest meme-stock rally fades, research firm says

Tilray cannabis marijuana
A worker smiles as she shows cannabis plants at the Tilray factory.

  • Cannabis stocks may be the next area of attention for retail investors as a recent rally in meme stocks fizzles, says Vanda Research.
  • Inflows for Tilray and Sundial Growers have picked up this week.
  • “Retail purchases of meme stocks probably peaked on Wednesday,” said Vanda.
  • See more stories on Insider’s business page.

The meme-stocks rally that’s propelled AMC Entertainment up more than 2,200% so far this year is showing signs of exhaustion, but a recent pickup in buying of cannabis stocks including Tilray suggests that space could be the next center of attention for retail investors, according to a research firm.

“Retail purchases of meme stocks probably peaked on Wednesday,” said Vanda Research on Friday, noting a slowdown in net inflows into shares of AMC, the top recipient of retail investment money in recent weeks. Its rally has carried through to GameStop, BlackBerry and other stocks favored by retail investors active on social media such as Reddit’s Wall Street Bets platform. Vanda monitors retail trading activity in more than 9,000 US stocks and ETFs.

Meanwhile, inflows of $28.6 million into shares of cannabis companies Tilray and Sundial Growers on Thursday were the strongest since earlier rallies in the first quarter of the year. That marked the first clear signs of a rotation out of meme stocks, said Vanda. There was also a significant pick-up in retail flow on Friday for Tilray, Sundial and Cronos, three of the largest cannabis stocks traded in the US.

Meme stocks bounced back into the spotlight for retail investors in late May as bitcoin and other cryptocurrencies were crashing. AMC shares began to surge after major shareholder Dalian Wanda Group sold almost all of its remaining stake in the company. Redditors cheered the newly available shares and flexed their newfound weight in the market.

While meme stocks are still heftier in value than weeks before, the rally was starting to fizzle with AMC shares pulling back. AMC on Wednesday had $66 million in new inflows, less than half of the $136 million mln it had averaged in the previous two sessions, said Vanda. BlackBerry picked up some of the slack by drawing in $110 million for its largest day of retail buying in 2021.

However, “as opposed to BlackBerry, we think the rotation into cannabis stocks has a lot more room to run,” said Vanda, adding that Sundial and Tilray were the fourth and seventh-most active tickers on WallStreetBets forums on Thursday.

Tilray and Sundial jumped during the week after Amazon said its public policy team will back the Marijuana Opportunity Reinvestment and Expungement Act of 2021. The MORE act would, among other actions, end criminal penalties for anyone who sells cannabis in states where it’s legal.

“Despite the low chances that the Act is passed in the Senate (due to the filibuster), increasing media coverage is likely to attract the attention of the average retail investor,” said Ben Onatibia, a senior strategist at Vanda.

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Meme stocks whipsaw as AMC share sale ends massive Reddit-fueled rally

Reddit
In this photo illustration a Reddit logo seen displayed on a smartphone.

  • Meme stocks largely retreated Thursday, with AMC, GameStop, and Bed Bath & Beyond all falling.
  • Some retail favorites, like Tilray, Clover Health, and Virgin Galactic continued to rally, though.
  • AMC dropped as much as 40% after announcing plans to sell nearly 12 million new shares.
  • See more stories on Insider’s business page.

A handful meme stocks held onto strong Thursday while others, including AMC Entertainment, GameStop, and Bed Bath & Beyond retreated.

BlackBerry led gains among meme stock Thursday before turning downward along with other well-known names. The stock, which fell as much as 8%, was the top conversation piece among retail-trader favorites on Wall Street Bets with AMC and GameStop behind it, according to data from Quiver Quantitative.

AMC, which nearly doubled in price yesterday, fell as much as 40% after the company announced a 12-million share sale. Trading halted three times for the stock amid the sharp decline.

Other meme stocks that have rallied this week fell with it. Bed Bath & Beyond dropped as much as 27% after its 63% one-day rally Wednesday. And the original meme stock, GameStop, retreated as much as 13%.

Beyond Meat, a new meme stock pushed by Mad Money’s Jim Cramer, also fell along with Koss Corp.

But not all of the retail-trader favorites declined.

Canadian cannabis companies Tilray and Sundial both rallied despite the meme-stock losses. Tilray, which recently completed its acquisition of Aphria, jumped as high as 16% Thursday, as Sundial rose 33%, putting both stocks on a two-day rally.

The two companies have benefited from positive sentiment from retail traders after Amazon announced it would back a federal bill to legalize marijuana. They were among the “most discussed” stocks on Wall Street Bets, Quiver Quantitative said.

Some other lesser-known meme stocks rallied alongside Tilray and Sundial, as well. Workhorse, the Ohio-based seller of electric vehicles and aircraft, jumped as much as 54%. Clover Health, the health insurer backed by Chamath Palihapitiya, jumped as much as 13% before paring gains, and space tourism company Virgin Galactic rose as much as 8%.

If you’re a Millennial or Gen Z investor willing to share your investing experience, reach out to the reporter of this article at ndailey@insider.com.

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Tilray and Sundial embark on 2-day rally after Amazon says it stands behind federal marijuana legalization

Tilray marijuana
A Tilray worker tends to cannabis plants.

  • Tilray and Sundial are rallying for a second day after Amazon endorsed a federal marijuana legalization bill earlier this week.
  • The two Canadian cannabis stocks are beloved by retail traders on Reddit investing threads.
  • Tilray and Sundial were part of the meme stock rally earlier this year amid the GameStop frenzy.
  • See more stories on Insider’s business page.

Canadian cannabis companies Tilray and Sundial are on a two-day rally after Amazon announced it would support a federal bill to legalize marijuana – and retail traders are celebrating.

Shares of Tilray jumped 12% to $19 Wednesday and rose 9% in early morning trading Thursday. Last month, Tilray completed its acquisition of Aphria, making the combined business the largest cannabis company in the world by revenue.

As for Sundial, the stock closed 13% higher at $1.13 Wednesday and jumped another 17% Thursday morning.

Earlier this week, Amazon said its public policy team will back the Marijuana Opportunity Reinvestment and Expungement Act of 2021, also called the MORE act, which would end criminal penalties for anyone who sells cannabis in states where its legal, decriminalize the use of cannabis in the US, and allow states to establish commercial marijuana sales.

Retail traders bullish on cannabis stocks have been hyping up the companies on Reddit’s top investing threads, and the sentiment is very positive. According to HypeEquity data, they were two of the top talked-about companies Wednesday among a group of 18 meme stocks, including AMC, Bed Bath & Beyond, and GameStop.

The stocks have seen a “significant pickup” of retail flows in recent days – the most since the meme stock frenzy began earlier this year, Vanda Research said in a recent report, noting the MORE Act as a catalyst for the uptick. The bill, which passed the House of Representatives in December, has “low chances” of being passed in the Senate, Vanda Research analysts said, but “increasing media coverage is likely to attract the attention of the average retail investor.”

In January, an army of retail traders poured into GameStop, starting a new trend of meme stocks. Amid a broad rally in meme stocks, Tilray and Sundial also surged but declined in the following months. Meme stocks have picked up again in recent weeks, though, led by an unprecedented rally in movie theater chain AMC Entertainment.

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Tilray climbs 10% as the cannabis company gets a double upgrade to ‘buy’ from Jefferies

Tilray marijuana
A Tilray worker tends to cannabis plants.

  • Tilray shares jumped 10% on Friday after Jefferies upgraded the cannabis company to a buy rating.
  • Tilray’s tie-up with Aphria was a “perfect match,” said Jefferies, which also raised its price target to $23 a share.
  • In the analysts’ upside scenario, the stock could climb to $31.
  • See more stories on Insider’s business page.

Tilray shares stepped up by roughly 10% on Friday, bolstered by a double upgrade to “buy” from “underperform” at Jefferies, which said the cannabis company entered into a “perfect” merger with Aphria.

The rating was lifted from underperform in a note published Friday. Jefferies also raised its price target to $23 a share from $4.77, which would represent 63% upside from Thursday’s closing price of $14.15.

The analysts said in an upside scenario, the stock could rise to $31, which would mark an upside of 119% from Thursday’s close.

Tilray said in December it had planned to merge with Aphria in a $4 billion deal that would create the world’s biggest marijuana company.

“For us, when Aphria and Tilray combined, it was the perfect match,” said Jefferies equity analyst Owen Bennett. “In Canada, a leading portfolio of brands, supported an efficient cost structure. In Europe, the market is now picking up, while Tilray’s scale and Aphria’s unique German positioning make it perfectly suited to succeed,” he wrote.

Meanwhile in the US, the combined company’s portfolio of consumer goods and strong balance sheet supports “excellent optionality” around both THC and cannabidiol, or CBD. When full federal legalization arrives in the US, brand awareness of hemp-food/CBD and alcohol offerings will be advantageous, with Jefferies seeing the US market sized at $50 billion in 2025.

Shares of Tilray on early Friday climbed by 9.9% to $15.55 in heavy premarket volume. The stock has pushed higher over the past 12 months by 81%.

Jefferies said it has been mostly cautious on Tilray during its coverage. “Our issue has been that while arguably being the best-placed business to capitalize on future European growth, industry development in that region to date has stalled.” At the same time, Tilray’s Canadian business had “struggled” and it saw Tilray as not taking advantage of its opportunity in the US, “arguably due to its constrained balance sheet.”

But it had been bullish on Aphria, it said, citing the company’s strong approach to branding and efficient cost structure while it had a “very robust” balance sheet.

When “the Tilray and Aphria businesses announced they would be combining in December 2020, we were encouraged. In our view, a combined company presents a compelling proposition,” wrote Bennett.

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