Shares of Neptune Technologies & Bioressources (NASDAQ:NEPT) jumped as much as 20.4% today after the marijuana extracts specialist issued a press release reminding investors that it will change its name to Neptune Wellness Solutions on Friday. As it turns out, today was a great day to be at the top of the industry's news cycle.
Although unrelated, marijuana peer Tilray saw its share price jump as much as 93.6% today, which lifted many marijuana stocks. That seems to be the case with Neptune Technologies, one of the smaller industry players.
As of 3:03 p.m. EDT on Wednesday, Neptune's stock had settled to a 10.1% gain.
Marijuana stocks have been cruising lately as investors grow increasingly excited about the industry's prospects, especially as multiple countries move to legalize its recreational and medical use. And companies including Constellation Brands and Molson Coors Brewing are making big splashes with related products. Even Coca-Cola is rumored to be interested in the space.
Today was by far one of the wackiest days in the industry's recent history. Thanks to a combination of a huge short position from Citron and a relatively low outstanding share count, Tilray stock nearly doubled on fairly standard comments from the company's CEO. That handed a market cap of nearly $25 billion (yes, "billion" with a "b") to a business that reported first-half 2018 sales of just $17.6 million.
The craze pushed many marijuana stocks higher today. And with Neptune Technologies issuing its release early this morning, the stock inadvertently became swept up in the emotion of the day.
Neptune is in the middle of transforming itself from focusing on its historical niche in nutraceuticals (foods with medical benefits) to one leveraging its extraction-process expertise, which could come in handy for the fledgling marijuana industry. That said, as with many companies in the industry, emotion appears to be far outpacing reality. The nearly $375 million company reported just $5.2 million in revenue in the most recent quarter, and lost over $4 million. Put another way, there's a long way to go for the business to earn its market cap, and a correction could be due.