Tilray Strengthens U.S. Position with Distillery Acquisition

A short squeeze could create tailwinds for TLRY

Digital Content Manager
Dec 8, 2021 at 10:12 AM
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Cannabis concern Tilray Inc (NASDAQ:TLRYis strengthening its position within the U.S. market. The company announced earlier it acquired Colorado-based Breckenridge Distillery, which produces bourbon whiskey and other spirits, for an undisclosed amount. The move is part of Tilray's plan to leverage brands to launch THC-based products once cannabis becomes federally legal in the U.S. At last check, TLRY is up 1.3% to trade at $9.57.

The brokerage bunch remains skeptical, however. Of the 15 analysts in coverage, 12 call the security a "hold" or worse, while three say "strong buy." Should that pessimism begin to unwind, TLRY could move higher. Meanwhile, the 12-month consensus target price of $12.74 is already a 37.7% premium to current levels. 

A short squeeze could fuel additional tailwinds for Tilray stock as well. Short interest is up 6.6% in the last two reporting periods, and the 41.46 million shares sold short make up 9.3% of the security's available float.

Tilray stock has had a few lackluster months on the charts. The equity just breached a former floor at the $10 level, after struggling with a ceiling at the $14 level since August. The 120-day moving average put a lid on TLRY's November rally attempt as well. Still, the security is up 15.9% so far this year. 

TLRY is seeing well-priced premiums at the moment, too. The stock's Schaeffer's Volatility Index (SVI) of 79% stands higher than just 4% of other readings in its annual range, suggesting options players are pricing in low volatility expectations right now.

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