Trading in Canadian cannabis company Tilray Inc (NASDAQ:TLRY) was halted twice on Wednesday in a wild session where the stock nearly doubled from the previous close at one point, whipsawed into negative ground later and then spiked in the last 15 minutes of business to finish higher.
Tilray stock soared to trade at a record US$300 per share before suspected sell-stop orders kicked in from players taking money off the table to knock the stock down to US$263.34, still up almost 70% on the day.
At that point, trading in the stock was halted for the first time.
The shares began trading some 10 minutes later and traded 64% up at US$257.73 about an hour before the close of business.
Some 40 miuntes before the close, trading was halted again and Tilray was last seen at US$224.68, up almost 45% for the session.
When trading resumed again about 10 minutes later, Tilray dove to trade at US$151.40, under the previous closing price of US$154.98. The stock then spiked into the close, jumping over 40% in 15 minutes of trade.
Tilray shares ended on Wednesday at US$214.06, higher by US$59.08 or by 38.12%. The stock was down however by 14% in after hours trade to US$183.63.
The rally in Tilray was inspired by news that the company had received approval to send a medical cannabis study drug to California.
S3 Partners analyst Ihor Dusaniwsky said Tilray is not yet a short squeeze, but it is getting close.
$TLRY not a short squeeze yet - shares shorted hit 3.5 million shares on 8/31 and haven't declined since then. Losses and high borrow costs will squeeze them eventually, but that hasn't happened yet. This is a buyers rally. https://t.co/5YGI4Jpo5P https://t.co/4VDftlwMhG— Ihor Dusaniwsky (@ihors3) September 19, 2018
The blistering advance forced shorts to fork over larger amounts of funds to maintain their margins and positions in the market, analysts said.
Options activity in Tilray had exploded, with volume nearly quadruple the average daily trading volume of 40,000 contracts, a report by Reuters said.
The Canadian cannabis sector has been a battleground between those touting the market opportunity stemming from the legalization of cannabis in Canada and short sellers who believe the stocks in the market are grossly overvalued.
Tilray is a cannabis producer based in Canada.