Cannabis tech company Weedmaps (MAPS) officially began trading today. It was up by more than 22% by market close and some are saying it could go as high as $40.
The Weedmaps IPO comes after closing a SPAC merger. When asked why he went the SPAC route rather than the traditional route Weedmaps CEO Chris Beals, told CNBC’s Squawk On the Street this morning, that he saw strong growth signals for the industry, both from new states legalizing marijuana and from expansion in regions where the product is already allowed.
A SPAC is also referred to as a blank-check company. These companies don’t have business operations. Instead, they go public with a traditional IPO in order to raise capital. Those funds are used to acquire a private company. In this case, Weedmaps is combining with SPAC Silver Spike Acquisition (Nasdaq: SSPK).
This morning WM CEO Chris Beals took to Twitter: “It’s been an incredible day at @Nasdaq as @weedmaps officially started trading under the ticker $MAPS. I’m really appreciative of the team and looking forward to us increasing our pace of innovation to help power cannabis retailers, brands and consumers.”
The stock opened at $18.50 this morning. And was up by more than 22% by market close.
Weedmaps claims it’s the leading technology and software infrastructure provider for the cannabis industry. It provides a two-sided marketplace, serving both customers and retailers as well as software as a service (Saas), including B2C and B2B.
The company’s marketplace keeps consumers up to date on information such as the availability of products and allows them to place orders with retailers. Customers can also rate and review businesses as well as their products. And as more states continue to legalize cannabis consumption, Weedmaps could be well-positioned to take advantage.
Speaking of taking advantage, Greg Talks Money said earlier today that the stock could easily climb as high as $40 because there’ll soon be a ton of demand in a low supply environment. And claims that most of the investors on the sub-Reddit r/WeedMapsInvestorsClub have “broccoli hands” aka that they’ll be holding on to the stock for at least five years.
“I’m estimating if we see the same volume that we saw back in December 30 million shares traded in a single day the stock could go as high as 40 dollars,” Greg says in his video.
And get this he thinks it could go even higher. “Now this could go much much higher maybe we could reach a 54 price sales ratio put in the stock at 66 dollars but I don’t want to get too ahead of ourselves, he said.”
We took a position on Weedmaps this morning using the Robinhood app. It’s free to download and free to make trades. Let us know what you think about Weed Maps IPO in the comments section below. Do you think it’s a good investment?
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