Canopy Growth, CGC US\Weed CN, is up over 4.5% on news that Martha Stewart is joining forces with the cannabis producer to advise on marijuana related products for humans and pets.
CGC US\Weed CN short interest is $1.33 billion; shares shorted of 28.97 million shares; 12.49% of its float. Stock borrow costs are 10% fee.
Short interest had been declining in the two weeks prior to Canopyâ€™s earnings report in mid-February but has increased by over 4 million shares over the last two weeks as Canopy Growthâ€™s stock price continued a slight downtrend after a strong performance in January.
Canopy Growth shorts were down $679 million in year-to-date mark-to-market losses prior to todayâ€™s news, and are down another $66 million today, bringing year-to-date losses to $745 million. The top ten most shorted stocks in the sector are down $106 million in mark-to-market losses today in a knock-on effect to the news. Martha might be a good thing for Canopy Growth long shareholders but definitely a bad thing for Canopy Growth short sellers.
We are seeing a sizeable amount of short covering today, which is adding to the long buying pressure as investors are increasing their exposure to Canopy Growth in their cannabis portfolio. With nearly three quarters of a billion dollars in mark-to-market losses we can expect a squeeze in the stock if the Martha Stewart effect takes hold and moves Canopy Growth stock price even higher.
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Managing Director Predictive Analytics, S3 Partners, LLC
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