Cronos Group Inc (NASDAQ: CRON) is having an incredibly strong start to the trading session in the pre-market hours this morning, following up on the strong gains that we’ve seen on the stock as of late. The gains come after the company connfirmed that it is in talks with the maker of Marlboro with regard to a potential investment. Today, we’ll talk about:
- The discussions;
- what we’re seeing from CRON stock as a result; and
- what we’ll be watching for ahead.
CRON Climbs On Discussion Confirmation
As mentioned above, Cronos is having an incredibly strong start to the trading session today, following up on the strong gains that we saw on the stock yesterday. Yesterday afternoon, the upward movement happened after rumors broke that the company was in talks with the maker of Marlboro cigarettes, Altria (MO).
The rumor suggested that Altria is interested in expanding its audience beyond traditional cigarette smokers and that the acquisition of CRON would allow the company to do so. As a result of the rumor, the stock saw dramatic gains as it headed for the closing bell.
Late last night however, those rumors were validated. CRON issued a press release confirming that it is engaged in discussions with Altria surrounding a potential investment in the company. In the press release, the company didn’t give much details. All it said was that it was in discussions with regard to an investment and that no such agreement has been reached. Of course, the company also said that there can be no assurance that the discussions will lead to an investment or any other transaction involving the two companies.
Nonetheless, the rumors were validated and investors are excited!
what We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Cronos, the news proved to be overwhelmingly positive. While there was not any confirmation that the two companies are discussing a takeover, any investment made by Altria into Cronos would likely be a meaningful one. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:26), CRON is trading at $11.49 per share after a gain of $1.32 per share or 12.98% 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 CRON. In particular, we’re interested in following the news surrounding the discussions between the company and Altria. After all, if all goes well, the company will likely receive a significant investment from the leader in the tobacco industry, and it could end up becoming an acquisition. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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