Bear Notes Roll Up for Tilray Stock After Q2 Losses

The shares of Tilray Inc (NASDAQ:TLRY) are down 9.5% to trade at $7.21 this morning, after the cannabis company reported worse-than-expected second-quarter losses and revenue. The company cited the pandemic-related shutdowns led to stockpiling that hurt pot demand in the second quarter. In response, at least four analysts have chimed in with price-target cuts this morning, the lowest coming from Stifel to $6.

Today's bear note onslaught is nothing new. Coming into today, 10 of the 12 brokerages in coverage doled out "hold" or "sell" ratings. However, even after today's report, TLRY's consensus 12-month price target of $8.18 is a 16.2% premium to its current perch, implying more bear notes could be on the way.

Much like sector peer Canopy Growth (CGC) -- which was one of the best stocks on the New York Stock Exchange (NYSE) yesterday -- Tilray stock has traded sideways for most of the summer. The $7 level has emerged as a floor during this period, but there is stiff resistance emerging at the shares' 50-day moving average. Year-to-date, TLRY is now down 59%.

Meanwhile, the options pits are full of bullish activity. This is per CGC's 50-day call/put volume ratio of 15.18 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 83rd percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets in the last 10 weeks.

Today's option pits are alive. In the first hour of trading, over 35,000 options have crossed the tape so far -- double the intraday average with volume pacing in the 99th percentile of annual readings. The most popular is the August 22 call, while new positions are being opened at the weekly 9/4 18-strike put.