Invest in bitcoin and weed they (*) said. What’s the worst that could happen, they said?
2019 will be remembered as the year the weed stock bubble burst. And that means one thing: straight edge investors who shorted the sticky-icky cleaned up.
Pot stock bears have cleared $993M YTD, as short exposure in the sector grew by $843M on the year. Those who viewed the pot sector’s 2018 glow up as a fluke and put their money where their mouth is certainly benefited as companies have missed earnings expectations and struggled to break through the red tape of regulation.
Let’s go to the tape, shall we? YTD, Cronos’ stock is down 36%, Pyxus is down 48%, and Tilray is down 75%. Define “industry leaders.”
Hence why devil’s lettuce shares are some of the most expensive to short. The average borrowing fee is 31% for the 20 most shorted companies in the industry, with Cronos Group leading the charge at 34.92%.
Speaking of sh*tty investments in 2019…
Bitcoin… ever heard of it?
Yesterday, the most well-known cryptocurrency dropped below $7k for the first time since November, reaching it’s lowest point since May.
The hottest alternative investment since Beanie Babies had its shares of ups and downs in 2019. The e-currency hit a high of $12.6k back in July before gradually declining toward year-end.
This, of course, pales in comparison to the free fall bitcoin endured from January to February of 2018 when it plummeted and mind-boggling 65%. So it’s got that going for it.
The bottom line…
Past performance may not be indicative of future results, but history certainly has a tendency of repeating itself…
Case in point: the dot-com crash of 2000, the housing crash of 2008, the bitcoin crash of 2018… and now the pot stock crash of 2019.
* Your uncle who watched CNBC one time