CGC Stock Suffers Amid Chair of Directors Appointment

The stock has lost roughly 58% since its late-April peak

by Lillian Currens

Published on Oct 10, 2019 at 9:29 AM

The shares of Canopy Growth Corp (NYSE:CGC) are trading lower following an announcement that former Constellation Brands (STZ) CFO, David Klein, has been appointed to the firm's new chair of the board of directors. The company's interim chair, John Bell, will remain as a director on the board. The stock is down 2.3% ahead of the bell this morning, just above its lowest close in two years at $21.83 from Oct. 1.

It has been a fairly steady slide down the charts for CGC since its late-April peak of $52.74, with the the pot stock shedding about 58%. The security's recent attempt at a breakout in late September was quickly rejected by its 40-day moving average, leading it to last week's two-year low of $20.52. Since then, the stock's 10-day moving average has kept a lid on the shares. 

Despite CGC's recent lows, the brokerage bunch is still quite bullish, with nine of the 16 in coverage calling it a "buy" or better. Plus, the consensus 12-month target price of $34.77 is at healthy 54.5% premium to last night's close. Should some of these bulls begin to change their tune, Canopy could be eyeing even more headwinds.

Short sellers, on the other hand, have started paying attention to the marijuana concern, with short interest up 20.5% in the last two reporting periods. These bears have an 18.9% grip on the stock's available float, too, which represents almost nine days of trading at CGC's average pace.

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