Tilray lockup expiration of stock in January may tempt early investors to take the money and run

The lockup in Tilray Inc‘s (NASDAQ;TLRY) shares following its initial public offering expires on January 15, 2019, and this will tempt investors to cash in if the sizzling rally does not die down and they opt to dump the stock.

The lock-up period is a predetermined amount of time following the IPO, where large shareholders such as company executives and investors are barred from selling their shares. In many cases, it runs for six months, as is the case with Tilray.

When that period runs out, investors will have to decide if it is time to take money out and book their profits or stick it out.

Analysts said the influx of more shares will give those more stock to use in playing the short side of the market.

READ: Tilray CEO encourages pharma and booze companies to enter the cannabis space

Tilray went public in July at US$17 per share. It hit a record intra-day high of US$300 on Wednesday, September 19, before closing 38% higher at US$214.06. 

The market value of the company will be close to US$19bn if the price of the stock stays close to US$200.

On Thursday, the market cap of Tilray stood at US$16.3bn, higher than Darden Restaurant’s US$14.4bn and double that of Alcoa‘s US$8.07bn. 

The stock was trading on Thursday down 18.3% at US$174.90, having traded between US$158 and US$244.

Privateer’s plunder

Exchange figures showed there are 93 million shares outstanding in Tilray, and 75 million of that is owned by Privateer Holdings, an equity fund focused on the cannabis industry where the CEO is Brendan Kennedy, who is likewise the CEO of Tilray.

The other two major figures in Privateer are Christian Groh and Michael Blue. All three are veteran financial professionals.

Another key investor in Tilray is Peter Thiel, an early investor in Facebook who is the co-founder of PayPal.

His Founders Fund became the first institutional investor in the cannabis industry through Privateer’s US$75mln Series B financing round in 2014.

READ: Tilray receives approval from US to import a medical cannabis study drug, shares soar almost 30%

Tilray was the first company to legally export medical cannabis products from North America to Europe. It also has a cultivation license from the government of Portugal to produce products for the EU market. Tilray products are currently available at pharmacies in countries throughout the EU.

Tilray was one of the first companies to be licensed to produce medical cannabis in Canada.  The company has a binding letter of intent to be the exclusive collaborator of Sandoz Canada, part of the Novartis Group.

Story by ProactiveInvestors