You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015.
Deployment of cash by MSOS appeared to help its largest constituents, where most of the money went.
When thinking about the potential impact on the stocks, it’s important to understand that the number of shares bought is important, but the number relative to the float is even more important.
Now that MSOS has deployed all of the cash inflows over the past several months, some may fear that this reduced buying will deflate the stocks, which, as highlighted above, haven’t exactly inflated.
While we haven’t conducted a complete review of how much the ETF owns as a percentage of the float or of the shares outstanding for each constituent, we think this is really the best way to think about it.
While traders were apparently disheartened to see the last of the cash in MSOS get spent, we think that this impacts sentiment more than actual prices.
We think another takeaway from the recent ramping up at MSOS, which currently has $972.5 million in assets under management, is to pay attention to the ETFs, which are an important source of demand for cannabis stocks.
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