Here's How Much Investing $100 In The 2018 Cronos Listing Would Be Worth Today

Investors who owned stocks since February 2018 have generally experienced some decent gains. In fact, the SPDR S&P 500 SPY total return in that time is roughly 9.6%. But there’s no question some big-name stocks have done much better than others in that stretch.

Cronos’ Bumpy Ride

Unfortunately, one stock that has struggled mightily since February 2018 is Canadian cannabis producer Cronos Group Inc CRON.

Cronos was the first Canadian cannabis producer to jump to a U.S. exchange, listing its shares on the Nasdaq son Feb. 27, 2018. The listing wasn’t an IPO because the stock had traded on the Toronto Stock Exchange and over-the-counter in the U.S. for several years. Cronos was originally named PharmaCan, and it conducted its Canadian IPO back in July 2014.

On its first day of non-OTC U.S. trading, Cronos opened at $8.24 and traded as high as $8.38 and as low as $7.17 before closing the day at $7.62, down 7.5%.

Cronos led the 2018 parade of cannabis companies jumping to the U.S., including Canopy Growth Corp CGC, Tilray Inc TLRY, and Aurora Cannabis Inc ACB, all of which had previously listed their shares only in Canada. Up to that point, those Canadian cannabis stocks had performed extremely well. However, Cronos was slammed is its first few weeks on the U.S. market.

From its opening price of $8.24, Cronos shares initially dropped as low as $5.12 by April 2018, but bounced back to finish the year up 26% from its initial U.S. listing price.

Cronos burst into 2019 with bullish momentum that propelled the stock to an all-time U.S. high of $25.10 in January 2019. Much of the buying volume came after the company announced in December 2018 that tobacco giant Altria Group Inc MO was taking a 45% stake in Cronos for $1.8 billion.

Since that time, a drop-off in investor enthusiasm and slower-than-expected Canadian cannabis sales growth have pushed Cronos shares steadily lower.

Cronos dropped below $10 in September, below its $8.24 initial trading price in October, and finally hit a 52-week low of $4 in March 2020.

Cronos In 2020 And Beyond

Cronos has since bounced back to above $5.70 as the U.S. stock market has stabilized, and there have been several reports that cannabis demand has increased since COVID-19 shelter-in-place orders were enacted.

Unfortunately, the volatile stock has thus far failed to break out of its bearish technical pattern of lower lows and lower highs, suggesting new lows may be in the cards in coming weeks.

Like many other cannabis stock investors, Cronos investors have fallen well short of the returns of the S&P 500 since coming to the U.S. In fact, $100 in Cronos shares purchased at the initial listing price would now be worth just $69.17.

Canadian IPO investors have fared much better given the original IPO price was only about 9.3 cents per share.

Looking ahead, analysts are expecting more struggles from Cronos in 2020. The average price target among the 13 analysts covering the stock is $5.73, suggesting only 0.6% upside from current levels.

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Courtesy photo.