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Greenlane Holdings (GNLN) Stock Surged 38% Today. Should You Buy It?

Simon Mugo trader
Updated 25 Mar 2022

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Key points:

  • Greenlane Holdings shares surged 38% despite a lack of news.
  • Investors seem to be getting positioned for next week’s earnings results.
  • However, the cannabis firm’s shares have fallen significantly in the past.

The Greenlane Holdings Inc (NASDAQ: GNLN) share price surged 31.5% despite the lack of releases from the company as investors bought its shares ahead of the release of its earnings results on March 31, 2022.

Also read: The Best Undervalued Stocks to Watch in 2022.

The last significant announcement from the company was regarding the planned release of its final full-year and Q4 2021 earnings results made on Wednesday, which triggered a brief rally in its shares price. It appears investors are expecting positive results on Thursday next week.

Greenland Holdings is a company that specialises in the development and distribution of premium cannabis accessories combined with lifestyle products. The company has a leading global presence as its products are sold in over 8,000 retail shops globally.

The company has over 16 years of experience in the cannabis sector, making it one of the oldest cannabis companies, which gives it an edge over new entrants who have to build their brand from scratch in a very competitive market.

Greenlane Holdings shares have fallen 87.43% in the last 12 months amid a broader selloff in the cannabis industry, and many investors are waiting for the company to turn around its fortunes.

However, it might be hard for the company to stage a significant rally unless the entire industry is also heading higher.

The company has lost most of its value from its IPO highs of $28 and has been on a multi-year downtrend following its April 18, 2019 debut on the Nasdaq market. It is not yet clear what it will take for the cannabis industry to discover.

Investors have essentially turned a blind eye to cannabis stocks despite the massive progress made by the sector in terms of regulation within the United States and other countries. For example, more countries have now legalised recreational cannabis use, yet investors are not buying the shares of cannabis companies.

Greenlane shares have fallen below the crucial $1 listing requirement, and the company may be forced to conduct a reverse stock split to boost its share price and attract institutional investors.

However, buyers may be stepping up to push GNLN shares higher.

On a different note, Greenlane’s Chief Marketing Officer, Adam Schoenfeld, has been selling his shares in the company he co-founded since last year, which raises questions regarding the company’s fundamentals. Luckily, he is the only executive selling his stake in the company.

*This is not investment advice. Always do your due diligence before making investment decisions.

Greenlane Holdings share price.

Greenlane Holdings share price 25-03-2022
Source: Tradingview

The Greenlane Holdings share price surged 37.98% to trade at $0.8358, rising from Thursday’s closing price of $0.6057.

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading