Shares of cannabis company Canntrust Holdings (OTCMKTS: CNTTQ) were once among the hottest plays in the US stock market, but the shares went into a downward spiral last year as the company went into collapse as part of the industry bust. The company announced that it filed for an order with the Ontario Superior Court of Justice for bankruptcy protection. This will allow it to restructure its debt just like American companies do in Federal Courts. However, in these situations stockholders typically get completely wiped out.
As a result the Nasdaq is delisting the stock and it is now trading on the US OTC as a pink sheets bulletin board stock. That is why the symbol now has a Q at the end of it. However, today its shares are up over 60% in morning trading and the stock is one of the most traded stocks in terms of volume on the US OTC market.
So people are buying the stock. And there is a lot of excitement on twitter about it as you can see from these tweets:
Is it time to dump your cannabis portfolio as the first #cannabis play goes “up in smoke”💨 ? – #CannTrust to Delist From New York Stock Exchange on April 27th #CannabisStocks #Startups https://t.co/fc2Xdcwwwe— Richard Hue (@Harbour128) April 19, 2020
Many people see stocks go up like this and try to buy them thinking that something big is about to happen with no understanding of how bankruptcy impacts individual stocks. In reality most of the actual buying is probably happening from shorts covering positions. For them the 60% move means nothing as they shorted at much higher levels.
There are simply better things to buy. There are even stocks at low prices like this one is at that are good buys. You can read about my top April stock pick here.