Sundial Growers (SNDL) Stock Pops After Annual Meeting

  • Today, Sundial (SNDL) is moving 1% higher as investors speculate about what could transpire during the company's annual meeting.
  • This annual meeting was postponed to today and includes a vote on a reverse stock split.
  • This split would allow Sundial to retain its Nasdaq listing.
SNDL stock - Sundial Growers (SNDL) Stock Pops After Annual Meeting

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One of the stocks that has risen to the top of the watchlist for many investors recently is Sundial (NASDAQ:SNDL). This Canadian cannabis stock has been one of the more volatile names in the sector of late. Indeed, retail interest in SNDL stock has turned this stock, briefly, into a meme favorite. Now, it trades at a discount of more than 65% from its 52-week high.

Like many other cannabis stocks, this sort of trajectory isn’t particularly out of the ordinary. However, there is a big catalyst that investors are hoping could cause a near-term rally with this stock.

Specifically, investors were hoping to receive confirmation of a reverse stock split last week. At the company’s annual meeting, previously scheduled for Friday, investors hoped that shares would split within a range of 10-to-1 to 25-to-1. This would maintain the company’s listing requirements, which have been in jeopardy for some time. That’s due to Sundial’s share price of around 30 cents per share at the time of writing.

However, this meeting has been adjourned to today. And while there’s no official announcement yet, there is plenty of chatter surrounding this stock. Accordingly, let’s dive into what investors are watching with Sundial right now.

Is SNDL Stock a Buy?

Right now, Twitter is seeing lots of commentary on the potential stock split. Speculation is abounding as to the size of the split and whether it has ultimately been approved. Most investors appear to believe that this split is likely to happen. Because, well, it has to.

However, it’s important to remember that a reverse stock split doesn’t change the fundamentals of the underlying business. Share counts can be manipulated higher or lower but have no real impact on the value of a company. Additionally, reverse splits are often viewed negatively, as these are typically only taken on by companies under severe selling pressure from investors.

However, the ability for Sundial to retain a Nasdaq listing is undoubtedly the key benefit investors are watching. Today, the stock is up more than 1% on hopes that this vote will pass.

Personally, this is a stock that’s been far too speculative for my blood since it became popular. There are plenty of other cannabis companies out there with better, and more integrated, business models to choose from. That said, I expect higher volatility this week, for traders looking for a stock that could bounce in either direction.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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