Shares of Tilray Inc (NASDAQ: TLRY) surged dramatically after it’s largest shareholder, a private equity firm with backing from Peter Thiel, announced that it would not be selling any of it’s remaining 75 million shares following the expiration of the original IPO lockup period next week.
“Privateer Holdings strongly believes in Tilray’s long-term global growth strategy and pioneering role in shaping the future of the legal cannabis industry. Given this, we do not have plans to register, sell or distribute the shares Privateer holds in Tilray during the first half of 2019,” said Managing Partner Michael Blue. “When we decide to distribute shares, we will do so in an orderly and deliberate manner to maximize tax-efficiency considerations for Privateer investors, while also taking into consideration potential impacts on Tilray’s public float. And we will do it in a way that reflects our long-term confidence in Tilray’s business model and management team.”
The announcement eased concerns of shareholders worried about the stock’s volatility coupled with the overall bearishness of the market. Some short sellers began betting that Privateer would close their position in TLRY to prevent further losses going forward.
Since the company went public back in July, Tilray’s shares have surged almost 500 percent in value. These lockup periods are meant to prevent insiders – such as executives, employees, and venture capitalists – from selling their shares for a set period of time as mandated by the Securities and Exchange Commission. This prevents early investors from flooding the market with their equity as retail investors come in, as such a situation could depress the stock and create extreme volatility for the now public company.
Tilray’s shares closed today at $96 per share, a 19.4 percent increase. Over the past month, share prices have fluctuated between 70-80 USD per share, with today’s announcement pushing the price up to pre-December levels. Although there are over 76 million TLRY shares outstanding, public exchanges only have access to 23 percent of TLRY’s total equity or around 17.8 million shares.
Privateer Holdings Company Profile
Privateer Holdings, Inc. is a private equity and venture capital firm specializing in incubation, seed, startup, early venture, mid venture, late venture, emerging growth, buyout, acquisition, and growth capital investments. It seeks to make investments in the emerging legal cannabis field and marijuana-related businesses. The firm invests globally. Privateer Holdings Inc. was founded in 2010 and is based in Seattle, Washington with additional offices in San Francisco, California; Newport Beach, California; and Denver, Colorado. – Bloomberg
Tilray Inc Company Profile
Tilray is a global pioneer in the research, cultivation, production and distribution of medical cannabis and cannabinoids. Tilray was the first licensed producer of medical cannabis in the world to have its facility Good Manufacturing Practices (GMP) certified in accordance with European Medicine Agency (EMA) standards.
The company currently serves tens of thousands of patients, physicians, pharmacies, governments, hospitals, and researchers in eight countries spanning four continents through its affiliated entities in Australia and New Zealand (Tilray Australia New Zealand Pty Ltd), Canada (Tilray Canada Ltd), Germany (Tilray Deutschland GmbH), and Portugal (Tilray Portugal Unipessoal Lda). –Tilray