Canopy Growth: Reverse split and glimmer of hope for shareholders - financial expert warns against speculation.

Canopy Growth: Reverse split and glimmer of hope for shareholders - financial expert warns against speculation.

According to a report by www.deraktionaer.de,

It's not a great week for all Canopy Growth shareholders. On Wednesday, the cannabis company's stock market value fell by a quarter after it announced that it would carry out a 10:1 reverse split. But despite the massive setback, there is still a glimmer of hope for the bulls.

Canopy Growth is listed on both the Canadian TSX and the American Nasdaq. However, a company's stock cannot be considered a penny stock, i.e. trade for less than a dollar, to be eligible to remain on the Nasdaq. A paper may trade below the magical $1 mark for a maximum of 100 days in a row.

This time is running out for Canopy Growth, and there is a risk of delisting and thus an outflow of investor capital. That's why the company decided to combine ten "old" Canopy shares into one "new" one. This step is generally not well received on the market, which was also confirmed with the cannabis title. Although the price has not yet fallen below the lows from October and November of around 47 cents, the recently more positive chart picture has deteriorated significantly again.

There could still be a small light at the end of the tunnel, as the German Bundestag has been discussing the decriminalization of cannabis in Germany since Wednesday and probably until Friday. If he decides to take this measure, it could give all stocks in the sector a new impetus.

The reverse split seems like an act of desperation to somehow keep the boat afloat. The market reacted accordingly to the news on Wednesday. Although a (strong) price jump is possible due to decriminalization in Germany, speculation on this scenario is only for gamblers.

The planned decriminalization of cannabis in Germany could potentially have positive effects on the cannabis industry. If this measure is adopted, it could result in all stocks in this sector receiving new impetus. This could lead to increased investment in the market and an increase in stock prices.

Canopy Growth's reverse split to remain listed on the Nasdaq was negatively received by the market and led to a decline in its stock market value. The uncertainties surrounding the company's future could cause investors to reconsider their positions in Canopy Growth. This could cause further turbulence in the market and affect investor confidence.