igcIndia Globalization Capital, Inc. (NYSEAMERICAN: IGC) has had a great time in the market over the past 30 days, gaining 1,000% as of two sessions ago. However, the stock has started to reverse directions, and the truth of the matter is that it is likely to see big declines ahead. Today, we’ll talk about:
- Why IGC is likely the next big short;
- what we’re seeing from the stock today; and
- what we’ll be watching for ahead.
Why IGC Is The Next Big Short
As mentioned above, India Globalization Capital is the next big short in my opinion. However, before we get into why, it’s important that you understand what pushed the stock up 1,000 percent in 30 days! The gains ultimately came from an announcement that the company entered into a license, collaboration and commercialization agreement with the makers of the Nitro G energy drink.
In the announcement, the company said that it is working on a formulation of an energy drink that will include CBD as an additive. Lately, investor interest in CBD has been very high. It’s clear that IGC has played off of that investor interest.
However, when we actually dig into the details, a few things become apparent. First and foremost, IGC doesn’t have a CBD drink under its belt yet. The process of coming up with one could take months, or even years. Moreover, even when that drink comes about, we don’t know what the demand for that drink is going to be.
So, essentially, the stock ran up 1,000% on speculation that the company’s new CBD drink will make waves when it hits the market. However, as excitement settles, investors are realizing that the gains were very unrealistic and the stock is making its way back down.
What We’re Seeing From The Stock
As the excitement surrounding the coming CBD-infused energy drink fades, investors are looking at the company without blinders on, and its not a good thing for India Globalization Capital. As a result, we’re seeing massive declines in the value of the stock today that are likely to continue ahead. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. At the moment (8:33), IGC is trading at $6.41 per share after a loss of $1.56 per share or 24.34% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on IGC. In particular, we’re interested in following the story surrounding the company’s coming CBD-infused beverage as well as the company’s work with regard to its alzheimer’s drug candidate. Nonetheless, we’ll keep a close eye on the news and continue to bring it to you as it breaks!
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