- NASDAQ: GRWG investors are bracing for the week to kick off with fresh losses.
- GrowGeneration Corp has hit back at Hindenburg Research for its allegations.
- Short-sellers may exhaust their hand and the pendulum may swing back up.
High volatility is set to continue for the company that helps cannabis producers go high – NASDAQ: GRWG is changing hands at around $16.15, down some 9% in Monday's pre-market session. Such an open would extend on Friday's fall of nearly 5%.
GrowGeneration Corp's shares have been hit by short-sellers – and their allegations against the company. Hindenburg Research, which has a significant short position against GRWG, has published a paper suggesting the stock price is rich. The group sees a fall of no less than 70% for the shares.
The sellers allege that that GrowGen's management has "extensive ties to alleged pump & dump schemes, organized crime, and various acts of fraud." The company hit back by saying it is set to take action against Hindenburg for defamation and called the paper "criminal."
The other accusation seems to have more merit – the valuation of the cannabis equipment firm is too high. While GrowGeneration says the global hydroponics system market is estimated to reach approximately $16 billion – growth has not been so fast as anticipated in the sector. Aurora Cannabis, a Canadian marijuana company, continues to extend its losses.
Nevertheless, the Denver-based company has 28 locations across the US and produces a wide range of products from hydroponic and organic gardening tp lighting and nutrients for the burgeoning pot sector.
At some point, NASDAQ: GRWG shares may turn from overvalued to undervalued – triggering buying from bargain-seekers. Are short-sellers already exhausting their hand?
GRWG stock forecast
GrowGen stocks are down over 20% from the 52-week high of $22.88 but are well above the pre-surge levels of around $9 seen in early August. Where is the point of equilibrium?
The closing level on Friday, August 14, of $13.24, could be an inflection point where buyers jump in. However, it may come sooner than that. An initial upside target is $17.67, the level preceding the surge to the all-time highs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD keeps the bullish tone around 1.1260
EUR/USD now manages to regain upside impulse and revisits the 1.1260 zone on Tuesday. The resurgence of the selling pressure continues to hurt the US Dollar amid fresh concerns over the US economy and unabated uncertainty stemming from the US trade policy.
GBP/USD turns positive around 1.3370
GBP/USD picks up renewed pace on Tuesday, leaving behind earlier daily lows near 1.3330 and refocusing on the 1.3360-1.3370 band amid a mild bearish tone in the Greenback. Meanwhile, investors continue to assess the recent Moody’s downgrade of US rating ahead of key UK inflation data on Wednesday.
Gold accelerates its advance, retargets $3,300
Gold now climbs to multi-day highs beyond the $3,280 mark per troy ounce on Tuesday, following the resumption of the selling pressure on the Greenback and propped up by a cautious market mood.
Bitcoin fails to reach all-time high despite building institutional and state support
Bitcoin price stabilizes around $105,200 on Tuesday, just 4% shy of its all-time high at $109,588. JPMorgan CEO Jamie Dimon says the bank will let clients buy Bitcoin.The Texas House is set to conduct a second reading of a bill that, if passed, would establish a Bitcoin Reserve.
China April slowdown shows the impact of economic uncertainty
Trade war uncertainty is denting Chinese confidence, resulting in slower economic activity in April. Retail sales and fixed-asset investment both underperformed forecasts amid heightened caution. Yet the impact on manufacturing was less than feared.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.