Personal Finance

Why Canopy Growth Corporation Stock Fell 10.1% in July

Interior of a cannabis growing facility.

What happened

Shares of Canopy Growth Corporation (NYSE: CGC) fell 10.1% in July, according to data provided by S&P Global Market Intelligence , after the company got a little more competition in the pot industry.

So what

Canopy Growth stock sold off ahead of the IPO ofTilray, Inc. (NASDAQ: TLRY) another Canadian cannabis supplier with growth aspirations. Tilray being public doesn't necessarily change Canopy Growth's earnings prospects, but it adds to the places investors can put their cannabis investment dollars.

Interior of a cannabis growing facility.

Image source: Getty Images.

I don't think it's a coincidence that the low point of the month for Canopy Growth was the day after Tilray's IPO. There was a rotation of investors out of Canopy Growth and into Tilray, which had the short-term impact of pushing shares lower.

Now what

Sometimes the mechanics of the stock market are more important to a stock's short-term performance than a company's actual earnings results. That's what I think we're seeing here in the dynamic between Tilray and Canopy Growth. There wasn't a fundamental change in Canopy Growth's business in July, but the stock's move is a reminder that the cannabis industry is small and volatile and something little -- like a competitor's IPO -- can affect the company's stock price.

10 stocks we like better than Tilray, Inc.

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tilray, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TLRY CGC

Other Topics

Stocks

Latest Personal Finance Videos

    #TradeTalks: The Changing E-Commerce Landscape

    e-Commerce Consultant James Thomson joins Jill Malandrino on Nasdaq #TradeTalks to discuss the changing e-commerce landscape, what consumers should prepare for as we head into shopping season and why you shouldn’t do last minute shipping.

    6 days ago

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More