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The shorts take on Tilray

Kerrisdale Capital Management, a renowned short seller, has released a scathing report on Tilray Brands (NASDAQ: TLRY), a Canadian cannabis company, outlining a litany of concerns regarding the company’s financial practices and prospects.

In a detailed exposé, Kerrisdale accuses Tilray of engaging in a continuous cycle of dilution to sustain itself while making questionable acquisitions and inflating financial metrics.

“We are short shares of Tilray Brands, a $2.4bn failing Canadian cannabis player running a familiar playbook for unsuccessful businesses trading in the public markets: given structurally unprofitable operations, the company has resorted to ongoing, shameless and massive dilution to stay alive, even as management compensates itself generously while operating metrics further deteriorate,” Kerrisdale said in its report.

You can read more on the matter here.

What’s going on?

• The US Government Is Missing An F-35 and Is Asking the Public to Help Find It (theDeepDive)

• BMO Reportedly Closes Down Its Auto Finance Division (theDeepDive)

• Canadian Housing Starts Flatline in August (theDeepDive)

• US, Iran swap prisoners after Qatar deal unfreezes $6 billion (Reuters)

• Russia Has Billions Stuck in Indian Banks (theDeepDive)

• US Supports Nuclear Power Expansion in Europe, Launches NEXT Program (theDeepDive)

• Canada risks more than C$50 billion in clean tech as incentives in limbo (Reuters)

• Canada’s Housing Crisis: New Projections Show Increased Supply Gaps in Key Provinces (theDeepDive)

• China’s Surging Youth Unemployment Prompts Beijing to Halt Data Series (theDeepDive)

What’s the latest?

• Autoworker Strikes May Move North: Unifor's contract with Ford Motor Co. is set to expire at 11:59 p.m. ET tonight. The union is negotiating with Ford in hopes of reaching an agreement that can be used as a blueprint for workers at General Motors and Stellantis.

• Grocery Cartel Meets: Top executives from Canada's major grocery chains are in Ottawa to meet with two federal cabinet ministers to discuss measures to stabilize grocery prices. The federal government has asked major Canadian grocers to come up with a plan by Thanksgiving to stabilize prices, warning that further action, including tax measures, could be taken if the plan is not sufficient. Grocery prices rose 8.5% year-over-year in July, significantly higher than overall inflation at 3.3%.

• Housing Starts Flatline: The annual pace of housing starts in Canada declined by one percent in August compared to July. The seasonally adjusted annual rate of housing starts for August was 252,787 units, down from 255,232 in July. The decrease was driven by a one percent drop in the rate of urban housing starts, with multi-unit urban starts falling by the same percentage while single-detached urban starts rose by two percent.

• Tesla In Turkey?: Turkish President Tayyip Erdogan has asked Elon Musk to consider building a Tesla factory in Turkey. During a meeting in New York, Musk reportedly mentioned that Turkish suppliers are already working with Tesla and that Turkey is among the leading candidates for the location of its next factory. Erdogan also expressed interest in cooperating on artificial intelligence and Starlink.

• Cleantech Funding: More than a year after Canada announced incentives to boost clean technology projects, no money has been allocated, putting over $37 billion in investments at risk. The Canadian government promised approximately $27 billion in investment tax credits (ITCs) over five years to encourage green technology investment, partly in response to US incentives.

How Steve Jobs Saved Disney

The stock market and stuff

• Peer-Reviewed Paper Implies Thacker Pass Project Could Have Lower Than Expected Lithium Extraction Costs (theDeepDive)

• China Evergrande shares sink 25% after wealth unit staff detained (Reuters)

• Lucid Posts Weak U.S. Vehicle Registration Data In July (theDeepDive)

In the juniors

• Beyond Lithium Reports New Discovery At Ear Falls Project (theDeepDive)

• Surge Battery Metals Reports Promising Drill Results At Its Nevada North Lithium Project (theDeepDive)

• Canopy Growth To Raise Just $25 Million At 19% Discount To Friday’s Close (theDeepDive)

FULL DISCLOSURE: Hertz Lithium is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Hertz Lithium. The author has been compensated to cover Hertz Lithium on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.