Cannabis Stocks Drop Sharply Today as Short Sellers Remain in the Driver’s Seat
These Heavily Shorted Pot Stocks Could Provide the Largest Gains in the Event of a Short Squeeze
The cannabis market has seen its share of bad news recently causing marijuana stocks across the board to drop in dramatic fashion. Fear has certainly gripped the market and the short-sellers remain in control. For now…
If you’ve been around the public cannabis markets for the past few years than you’ve seen this same story play out multiple times now. Stocks sell-off in anticipation of the ‘Sell in May and Go Away’ phenomenon and continue to decline over the spring and summers months as volume dries up and sentiment flips to the negative side.
Optimism starts to fade and investors now begin to question the same stocks they were once very bullish on despite very little changes fundamentally. Investor psychology on a mass level plays a huge role in the short term direction of stocks. You’ve likely noticed that trading cannabis stocks during the summer months is similar to trying to swim against a moving river. After taking a few loses, most investors will likely pack up shop for the summer and take a vacation or watch from the sidelines.
It’s during this time of year that the short seller takes full advantage of the pessimistic outlook and dig in putting further pressure on stocks. Negative news gets amplified and short positions continue to grow in size until a major catalyst arrives that flips the script causing stocks to rebound off the bottom and the cycle to repeat.
Today we are going to take a look at the top 10 most short stocks as of August 15, 2019. Heavily shorted stocks such as the ones featured below oftentimes make the strongest rebounds once the market reverses. This is known as a ‘Short Squeeze‘ and is normally caused by a large surprise catalyst that forces short sellers to scramble to buy back shares in the market to cover their short positions. New buyers make this short-covering more difficult for the shorts and as a result prices climb sharply.
Now that we’ve provided some context, here is our list of the 10 most shorted cannabis stocks today. Our list is ranked from the lowest to highest short positions as a percentage of the company’s total shares outstanding.
- Shares Short: 2.57 million
- Short Position Change: +147k
- Shares Outstanding: 151.30 million
- Percentage of O/S: 1.70%
- Shares Short: 4.90 million
- Short Position Change: -936k
- Shares Outstanding: 251.04 million
- Percentage of O/S: 1.95
- Shares Short: 9.58 million
- Short Position Change: +858k
- Shares Outstanding: 346.66 million
- Percentage of O/S: 2.76%
- Shares Short: 31.91 million
- Short Position Change: +349k
- Shares Outstanding: 1.02 billion
- Percentage of O/S: 3.14%
- Shares Short: 8.97 million
- Short Position Change: -2.86 million
- Shares Outstanding: 256.90 million
- Percentage of O/S: 3.49%
- Shares Short: 3.46 million
- Short Position Change: 78k
- Shares Outstanding: 94.43 million
- Percentage of O/S: 3.66%
- Shares Short: 5.21 million
- Short Position Change: +667k
- Shares Outstanding: 141.48 million
- Percentage of O/S: 3.68%
- Shares Short: 12.13 million
- Short Position Change: +1.94 million
- Shares Outstanding: 275.26 million
- Percentage of O/S: 4.41%
- Shares Short: 4.16 million
- Short Position Change: -439k
- Shares Outstanding: 92.45 million
- Percentage of O/S: 4.5%
- Shares Short: 2.56 million
- Short Position Change: +719k
- Shares Outstanding: 49.18 million
- Percentage of O/S: 5.2%
* Short position data posted every 2 weeks via Stockwatch.com.
Best of luck to you all and happy investing.
Editor in Chief | The Cannabis Investor
Charts source: Barchart.com
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