Hexo Corp (NYSE: HEXO) produces and sells cannabis-based products. The firm is based in Canada and has a market capitalization of $650M. Cannabis names have been popular shorts in 2019 and HEXO is no exception. The borrow fee has ranged between 10% and 50% before early October when the company announced the resignation of its CFO. Some research analysts also downgraded the stock, and the borrow fee spiked to 125%, coming back into the 40s today.
Utilization is at 70% and short interest is 13% of the float. Share price volatility may also be driving shorting demand, as the price fell from a 52-week high of $8.40 in April 2019 to a $2-handle today. We are seeing inventory from both Canadian and US lending desks. Seven counterparties asked the IBKR Securities Lending desk for availability before the open.
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