$SNDL is currently one of the most appealing stock picks with huge catalysts that are being underestimated or simply ignored — understandable seeing the number of narratives floating around forums and MMS designed especially to drive your attention to what the big interests really want to.
The company's financials
At the beginning of 2020, Sundial’s new leadership outlined their primary objectives:
To deliver industry-leading, best-in-class products with a focus on inhalables
To de-risk [their] balance sheet and improve liquidity
To increase [their] capacity utilization to unlock the value of our high-quality assets
With $600M of cash on balance, $SNDL is one of the best cannabis stocks from a financial point of view, not to mention they have zero debt, while its competitors ($ACB, $TLRY, etc.) are floating in halves of billions of debt.
The big interests
Financial institutions' goal is to short the company and do everything possible to bankrupt it.
With many catalysts in sight, they seem to have targeted $SNDL when in Dec 2020 it had received an extended 180-days grace period to maintain stock pricing levels above $1,00 or get delisted from the NASDAQ index at expiration.
It can be seen how short interest started to rise ever since elections (due to cannabis stocks hype), just to slingshot to over 300% by Q1 after the delisting announcement. It was their perfect catalyst for short sharks.
Why the short interest is declining
Financial institutions like hedge funds are purely about risk management, and some of them are looking at a possible Q3 outperformance. There are many reasons as to why, but in short, let's put a TL;DR bullet list:
- Top financials within the competitors
- Actively growing and expanding company, with constantly increasing revenue
- Imminent cannabis legalization
- General market recovery post C#VID
Don't get me wrong: fundamentally speaking, hedge funds do acknowledge that $SNDL is one of the best cannabis companies, however, they'd rather make 10x more money by shorting it and doing everything possible to bankrupt the company.
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