Rumour: STZ to increase stake in Canopy?Interesting rumour to go with this recent sp spike? See below:
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Canopy Growth Corp (NYSE: CGC) is starting to see gains early on in the trading session, up nearly 2% so far as rumors hit the tape. The rumors surround the idea that Constellation Brands, Inc. (NYSE: STZ) may increase its stake in the stock. Here’s what’s going on:
STZ Stock Gains As Constellation Brands May Increase Stake
Through the social realm and on message boards, we’re seeing an interesting rumor start to take shape surrounding Canopy Growth Corporation. According to the rumor, the company’s largest investor, Constellation Brands, is intereted in increasing its stake.
In November of 2018, Constellation Brands announced that it had closed a deal worth $4 billion. Under the terms of the agreement, the company purchased approximately 37% of CGC, flooding the company’s balance sheet with cash in the process.
With what we’ve seen from the cannabis industry as of late, it makes sense that Constellation Brands would want to increase its stake in the world’s largest cannabis company. After all, regulatory overhaul is leading to a vast emerging market that experts expect to grow to be worth tens of billions of dollars annually over the next few years.
Should STZ make the decision to purchase more stock in CGC, it will benefit more as the company continues to expand its global footprint, including an entrance with a splash in the United States once cannabis becomes federally legal.
Keep In Mind That This Is A Rumor
While the rumor suggests that we’re going to hear a very positive announcement out of Canopy Growth Corporation relatively soon, it is still a rumor. I have reached out to parties on both sides but have yet to receive a comment on the matter.
With that said, it’s important to keep in mind that rumors are the most common form of market manipulation today. So, if you’re going to trade based on the rumor, please make sure that you do so with caution.
CGC Is A Strong Play Regardless Of Rumors
At the end of the day, in my view, CGC is an incredibly strong play, regardless of if Constellation Brands increases its stake or not. Think about it, we’re in the midst of a quicky emerging market, and those that make early moves in these spaces tend to be long-run winners.
Canopy Growth Corporation has not only made early moves, the company has literally become the largest cannabis company in the world early on. It is taking a dominant role in an emerging market. Ultimately, that is a recipe for long-run success.
https://alphastocknews.com/canopy-growth-corporation-cgc-stock-gains-on-stz-stake-chatter/912/