To look at Cannabis One Holdings Inc. is to view a bloodied stock chart squashed by the weight of a crushing short position
.
The idea behind trading ahead of a deal in the case of Cannabis One is this: open a short position, possibly a naked short, and then cover it by picking up shares through the planned capital raise, where stock can be acquired for a discount to the market price. Long investors can also profit by recycling their stock, selling off after hearing about a financing, then buying in again at a discount during the capital raise.
But investors shorting the stock ran into a problem. Mascio caught wind of the increasing position and terminated the financing, canceling what would be the easiest method to close out a short position. During the period Mascio says the company stock was hurt by shorts, it released full-year financial statements and accelerated the expiration of some warrants at the behest of the investment bank — which contributed to a 40% single-day plunge, though the company rescinded the acceleration.
The trading strategies that rely on the pot industry’s thirst for cash have involved some of the largest businesses such as Canopy Growth Corp. CGC, -0.86% WEED, -0.92% When Aurora Cannabis Inc. ACB, -0.13% ACB, +0.20% traded as a penny stock, for example, an unknown fund shorted the stock ahead of several of its early bought deals, according to a hedge-fund manager familiar with trading and financing.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
A Wrigley chewing gum heir and a former Patrón CEO go all in on cannabisSurterra Wellness, a cannabis company helmed by a former CEO of Wrigly, raised $100 million to help fuel its rapid expansion. Among the investors participating in the round was Edward M. Brown, a longtime executive at Patrón Spirits.
Read more »
Woman, Gay Best Friend Go On Another One Of Their Little AdventuresPASADENA, CA—With the intention of letting loose, hitting the town, and maybe even "getting into a little mischief," Christine Fehrman, 33, and her closest gay friend Paul Daganais, 28, have embarked on yet another one of their special little adventures, sources confirmed Thursday.
Read more »
Police seize 5,000 pounds of fireworks from illegal sellerGet breaking national and world news, broadcast video coverage, and exclusive interviews. Find the top news online at ABC news.
Read more »
Trump Punches Huawei and Global Tech Firms Get a Bloody NoseWashington’s blacklisting of Huawei is casting a net that extends far wider than its target: It is curbing the revenue of U.S. and Japanese electronics companies, cutting into Taiwanese chip orders, and giving Huawei rivals an opening.
Read more »
Trump Punches Huawei and American Tech Firms Get a Bloody NoseWashington’s blacklisting of Huawei is casting a net that extends far wider than its target: It is curbing the revenue of U.S. and Japanese electronics companies, cutting into Taiwanese chip orders, and giving Huawei rivals an opening.
Read more »
Former GOP representative Aaron Schock reportedly filmed putting money in go-go boy's underwearSchock, who has denied frequent rumors about his sexuality, voted against marriage equality and lifting the ban on gays in the military.
Read more »