What happened

Shares of Pyxus International Inc. (NYSE: PYX) were up 28.3% as of 11:49 a.m. EDT on Monday after Citron Research tweeted that the stock could double. In particular, the tweet from Citron expressed optimism about Pyxus stock "as long as investors are cannabis crazy."

This tweet also stated that Pyxus has "real management" and especially noted the "favorite hire" of Bryan Mazur as Pyxus' executive vice president earlier this year. Mazur joined Pyxus after serving as an executive with Keurig Dr Pepper for 12 years. 

Marijuana buds on top of tiny Canadian flags.

Image source: Getty Images.

So what

Pyxus, until recently known as Alliance One, supplies tobacco leaves to cigarette manufacturers. So why would it get swept up in the marijuana stock frenzy? And why would a single tweet cause Pyxus stock to skyrocket?

The answer to the first question is that Pyxus is now also in the cannabis business. On Oct. 2, Pyxus announced that its indirect subsidiary, Goldleaf Pharm, received a medical cannabis cultivation license in Canada. This news followed a previous announcement that another indirect Canadian subsidiary, Canada's Island Garden Inc., won approval from Health Canada to market cannabis oil products. 

As for the question about why a tweet would provide such a big catalyst, the answer relates to the source of the tweet. Citron Research is led by well-known short-seller Andrew Left. Public statements by Left and Citron have caused other stocks to soar or sink in the past. For example, a negative report released in August by Citron about Cronos Group, a major Canadian marijuana grower, resulted in Cronos' share price plunging close to 30%.

The biggest question, though, is whether Citron's optimism about Pyxus is on target. Could Pyxus stock actually double? Maybe.

There are at least three common denominators between Pyxus and Tilray (TLRY), which saw its stock rack up triple-digit-percentage gains in just a few weeks. Both Pyxus and Tilray have relatively low stock floats, with Pyxus' stock float currently only 8.3 million shares. Pyxus' short percentage of float is also near the same level as Tilray's was prior to its huge run. Both stocks also trade on U.S. stock exchanges, which gives them higher visibility to a larger group of investors and traders.

Now what

Traders might jump on the Pyxus train like they did with Tilray. However, chasing momentum doesn't usually end very well.

Investors should instead ignore the hype and focus on the long-term business prospects for Pyxus. It's important to remember two things about the company. One is that it still makes most of its money from tobacco, not marijuana. Another is that its Canadian subsidiaries are minor players in the country's cannabis industry.

There's also one other thing that investors should note: A tweet from a short-seller shouldn't substitute for researching Pyxus' business prospects on your own. Citron's Andrew Left frequently isn't right.