(Bloomberg) — A surge in shares of cannabis companies has resulted in short sellers facing losses of over $105 million this year, but that hasn’t deterred traders from betting against the sector.
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In the last 30 days, short sellers have invested $91 million in new positions, anticipating a decline in pot stocks despite the current losses, as stated in a report from S3 Partners LLC. These contrarian trades are occurring as cannabis companies experience growth due to expectations of marijuana being reclassified and the potential advancement of the SAFE Banking Act in the US Congress, which would improve financial services accessibility for the industry.
During this month, the MJ PurePlay 100 Index, which includes stocks from US and Canadian cannabis companies, has seen a 19% increase.
“If the rally is exaggerated or if these measures take longer than expected to materialize, we may witness a future decline in stock prices and an increase in short selling within the sector,” said Ihor Dusaniwsky, managing director of…
2023-09-18 15:16:21
Original from finance.yahoo.com
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