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.
As of this morning $TLRY short interest is $728.42 million, 3.40 million shares short, 33.01% of float. Rates on new shorts were 500% to 800% fee range but by the end of the day rates were down to the 300% to 400% fee level. You can still short #Tilray if you can get a locate. https://t.co/B9WMPOZqbE
— Ihor Dusaniwsky (@ihors3) September 20, 2018
"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."
The move in Tilray is beyond comprehension. No one needs a market pundit to explain that. This is just the dynamic of trading low float stocks. Yes we are short and will hold a manageable position until rationality sets in
— Citron Research (@CitronResearch) September 19, 2018
Tilray stock hit an all-time record of US$300 Wednesday before suspected sell-stop orders and profit-taking dragged the stock down.