Friday, May 14

‘This is just stupid time’

But Wall Street traders warn Tilray’s valuation is getting too extreme after its stock move. The company now has a market value of more than $20 billion, trading at more than 500 times its 2018 estimated sales versus the S&P 500’s 2.2 times sales, according to FactSet.

Tilray reported just $17.6 million in sales over the last two quarters with a net loss of $18 million in the same time period.

“This is just stupid time. I can’t believe the valuations at this stage,” Investitute co-founder Jon Najarian said in interview Wednesday.

The trader said he rode some of Tilray’s move higher after its IPO, but isn’t currently long the shares.

One well-known short-seller, who actually recommended Tilray’s shares in the middle of August, also believes the market has gone too far.

“The whole space is crazy, but Tilray is crazy in a life of its own,” Citron Research’s Andrew Left said in an email Wednesday. Left confirmed he is short Tilray shares on social media earlier on Wednesday.

Another Wall Street trader compared the mania surrounding pot stocks this year to 2017’s cryptocurrency market craze. For example, Riot Blockchain shares surged by more than 400 percent during the fourth quarter of last year.

“It reminds me of Bitcoin / Blockchain late in 2017 … There was a stock called RIOT who experienced explosive growth in its stock price simply because it was one of the few ways to invest in bitcoin publicly,” Baird institutional sales trader Michael Antonelli said in an email Wednesday. “Humans are emotional creatures and nothing is worse than seeing your friend get rich in a pot stock, while you sit in an index fund. So I have little doubt that people are chasing the stock higher so they don’t feel left behind.”

Riot Blockchain shares are down more than 85 percent this year.

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