Will Tax Loss Selling Apply More Pressure on Tilray (TLRY) Stock?

With end of year upon us, a lot of investors are looking to make moves designed to lower their 2019 tax bills. Selling stocks with losses helps to lower capital gains taxes, and with Tilray, Inc. (TLRY) shares down 75.6% on the year the stock is likely to experience additional selling pressure in the final days of the year.

Tilray has been hit hard in 2019 as investor euphoria in the marijuana sector has waned and resulted in major losses for the entire sector. TLRY stock slid steadily through the course of the year, and any investors that bought into the stock during the year are looking at big unrealized losses. TLRY shot steadily higher when it went public in summer of 2018 but started to fall in October of last year and has traded steadily lower since. Tilray has yet to turn a profit, which is normal for the marijuana sector. The fact Tilray is losing money is not the biggest problem for the company since it is accepted in the sector. The biggest problem for Tilray is that it has repeatedly failed to hit analyst estimates. The company has posted weaker than expected profits the last four quarters. Sales have been coming in above expectations, but with the company losing money, missing estimates, and bearish sentiment in the sector as a whole will likely lead to more selling and TLRY is going to struggle to regain Wall Street's confidence until the company is able to start hitting analyst estimates. The company will next report earnings February 11 and until that time the stock will likely continue to show weakness.