Hype around Tweed Marijuana, the most anticipated IPO on the TSX Venture in years, is fading fast. The value and volume of Tweed Marijuana is declining by the day and investors who rushed in above $4.50, the day it went public on April 4th, are likely regretting it now.
Tweed was down 17% to $2.42 per share Tuesday.
What has to be most concerning for investors riding this momentum play is the steady decline in volume since going public.
Tweed traded 9.8 million shares on April 4th the day it went public. Its volume dropped to roughly 7 million shares on the 7th, 5.8 million shares on the 8th, 3.4 million shares on the 9th, 2 million shares on the 10th and then 1.2 million on April 11th. Tweed’s value has fallen as it fails to find new investors willing to speculate on Canada’s preeminent weed company.
Finally, volume bounced back yesterday to 2.1 million. It had traded more than 1.8 million by 1 PM EST Tuesday.
Tweed’s decreasing volume has hurt its share price as the stock was down for the 5th day in a row Tuesday.
Tweed Marijuana – 5 Day Chart
Tweed is down more than 40% since April 8th and close to 50% from its high of $4.75 on April 4th.
On April 14th, Tweed announced a partnership with Arizer to bring high quality vaporizers to Tweed Medical Marijuana customers.
An excerpt from Monday’s press release is below:
Tweed Marijuana Inc. (TSXV: TWD) is pleased to announce that its wholly owned subsidiary Tweed Inc. (“Tweed”) has partnered with Canadian company Arizer to offer Tweed customers a choice of the Arizer Solo and Extreme Q vaporizers.
Tweed will be offering these vaporizers at an exclusive price available only to their registered customers. “We truly believe in the benefits of using a vaporizer to consume medical marijuana,” said Chuck Rifici, Tweed’s President and CEO. “For this reason we are proud to offer these vaporizers to our customers at a discounted price to encourage their use.”
Vaporizing is a way to inhale the bioactive components of medical marijuana while avoiding burning of plant matter. The vaporization of cannabis is possible because the trichomes, which contain the main therapeutic components of cannabis, are converted to vapor at a lower heat than it takes to burn the plant matter. Vaporizing is an effective alternative to smoking which provides the same therapeutic effect without exposure to irritant compounds resulting from the burning of plant matter.
Click here to read the entire article.
Below is an excerpt from an article titled, Investors fret over Tweed’s Valuation, published on Pinnacle immediately following Tweed’s IPO:
James West of the Midas Letter recently wrote that, “Tweed estimates that its average selling price will be $8.80 per gram of marijuana, which implies gross annual revenue of CA$132 million, or $3.77 a share.”
This valuation had some investors debating the true value of Tweed’s business model – especially after opening at $4.60 per share on Friday only to collapse to $2.59 by the close.
Tweed’s market cap had crashed down to $84.17 million on Tuesday. As we’ve said since the beginning, Tweed’s valuation can only be speculated upon until it begins publicly reporting its costs, margins and EBITDA for at least a few quarters.
