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Here's how much lower Tilray shares have to go before shorts can make money on the bet

Last updated: 13:30 21 Sep 2018 EDT, First published: 13:15 21 Sep 2018 EDT

Tilray graph
Short-sellers of Tilray may have to wait a while before making money on the stock

Short-sellers in Canadian cannabis company Tilray Inc (NASDAQ:TLRY) stock may have a long wait before they can make money on their positions, an analyst from S3 Partners said Friday.

Ihor Dusaniwsky, managing director of Predictive Analytics at S3, told Proactive Investors in an interview that around 2.5mln shorts set up their positions "below the US$100 level" and that "no sizable shorts" are coming into the market.

"Seeing that most of the short selling was done when Tilray was below US$50 per share, I would say that, on average, most shorts will not be profitable until Tilray’s stock drops down below US$40 per share," he said in an email to Proactive.

That may take a while since Tilray stock was trading at US$135.41 by midsession on Friday, ranging between US$121.51 and US$144.88.

READ: Cannabis short-sellers may be forced to cover soon as huge losses pile up, says S3 Partners

Dusaniwsky said about 183,000 shares were covered on Thursday and that he is still seeing some shorting as there is "a tiny bit of new stock loan availability (which) hit the street" on Friday. A day, earlier, he tweeted about the short interest in Tilray.

"There will not be any significant increase in shares shorted because there is just no stock loan inventory in size left on the street," the S3 Partners analyst, who closely follows market shorts, said.

READ: Tilray CEO encourages pharma and booze companies to enter the cannabis space

Tilray has been a battleground stock for the past few sessions, with Andrew Left of Citron Research calling its advance "beyond comprehension."

Tilray stock hit an all-time record of US$300 Wednesday before suspected sell-stop orders and profit-taking dragged the stock down.

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