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Burnt by the Sun

Sundial Growers (NASDAQ: SNDL) is a cannabis strain producer based in Canada with a $255M market capitalization.  Cowen & Co. led the company’s IPO in July of 2019, raising $143M with a price of $13/share.  Cannabis stocks had a tough 2019, with many names moving lower.  Sundial shares took part in the trend, being offered in the $2-handle today.  The borrow fee fell along with the stock price, from 100% in July to 27% today.  Short Interest doubled since November 1st but the fee indicates the market can meet this demand.  With 70% Utilization and banks offering to lend to IBKR, we don’t see evidence of supply constraint.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Margin Trading

Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.

For additional information regarding margin loan rates, see ibkr.com/interest

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