The traders of the day behind GameStop Corp.’s meteoric rise last month are turning their attention to cannabis stocks, betting that President Biden’s administration will push to further decriminalize the drug.
Discussion of cannabis companies has exploded among users of Reddit’s popular WallStreetBets forum. As of Thursday morning, the top three stocks mentioned on that forum in the last 24 hours were Canadian cannabis companies, according to Swaggy Stocks, a website that tracks mentions of a company’s ticker symbol on WallStreetBets.
The rumor online has sent shares of the three companies – Sundial Growers, Tilray and Aphria – skyrocketing on Nasdaq. The sundial was up 79% on Wednesday, while Tilray gained 51% and Aphria gained 11%.
Cannabis company stocks have rebounded since late last year thanks to investor bets that the Biden administration will be more industry-friendly. But just this week, Sundial and Tilray prices have more than doubled.
The recent surge is the latest example of individual investors coming together to boost prices in small businesses. The practice has long been common in the cryptocurrency market, where traders are targeting an asset that can be easily moved. That behavior has increasingly spread to the stock market as millions of people, trapped at home for the past year due to the coronavirus pandemic, have turned to day trading through brokerages like Robinhood Markets Inc.