- Tilray shares briefly fell below $17 per share on Thursday, slipping below the company’s initial public offering price for the first time ever.
- So far in 2019, Tilray shares have shed more than 75% of their value. It’s a sharp contrast from the company’s 2018 performance, which saw it surge 315% between its July IPO and year-end.
- The weak performance is in line with the entire cannabis sector, which has struggled in 2019.
- Traders betting against the industry, however, have made sizable gains.
- Watch Tilray trade live on Markets Insider.
The popular cannabis stock has lost more than 75% this year through Wednesday’s close, weighed down by weak earnings as well as waning investor confidence in the cannabis sector.
It’s a stark contrast from the cannabis stock’s performance in 2018, when — after its IPO in July — it surged more than 1,100% to an all-time high of $214 per share on September 19. Even though Tilray didn’t hold onto the incredible gains for long, the company still ended 2018 up 315% from its IPO price.
But in 2019, pressure on Tilray stock began to mount. In January, Tilray’s post-initial public offering lockup period expired, sending shares down.
The entire cannabis sector has been weighed down as well. In 2019 shares of major cannabis companies such as Canopy Growth, Cronos, Aurora Cannabis, Hexo and Tilray have been battered by increased competition in the industry, backlash over vaping-related illnesses and deaths, and regulatory pressure in the US and Canada.
As the stocks of popular cannabis companies have fallen, short sellers betting against the industry have profited. Traders who have placed short bets on the cannabis sector have made $993 million in mark-to-market gains year-to-date through December 18 according to data from S3 Partners, a financial analytics firm.