Whitney Tilson: Aphria Inc Crashes; Tilray Takedown; Brexit

Whitney Tilson’s email to investors discussing Aphria Inc (NASDAQ:APHA) crashes; Tilray takedown; Brexit; Project Punch Card Conference.

1) After tumbling 23% yesterday in the wake of Gabriel Grego’s epic takedown at our shorting conference (slides and video here and here), Aphria Inc (APHA) crashed another 26% today in light of the company’s laughably non-responsive response, which was easily rebutted. Some hilarious stuff about APHA on Twitter, such as this:

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Q3 hedge fund letters, conference, scoops etc

2) In addition to Gabriel's APHA pitch, Chris Brown of Aristides Capital also gave us permission to share his presentation. Chris is one of the smartest investors I know. He started his fund with $500,000 about a decade ago and has put up incredible numbers, earning it the #1 Sortino Ratio among equity long-biased funds from the market bottom in March 2009 through 2017, according to BarclayHedge. Consequently, Aristides has grown to just over $100 million today, despite being in Toledo, Ohio of all places. (Chris isn’t looking to grow much larger, as his strategy focuses on a lot of small caps and special situations.)

Yesterday, Chris gave a great presentation on why he’s short yet another foolishly valued pot stock not named APHA, Tilray (TLRY), which you can download here. He shares my belief that, even though it's down by nearly 2/3 since Sept. 19 (when I called the peak on live TV at the exact hour it peaked at $300), it's an even better short today now that the bubble has burst and the collapse is well underway.

4) I’ve long believed that Brexit is so massively stupid that it might not go through. Can you imagine the disruption if California decided to secede from the U.S.?! Well, the odds of no Brexit just went up quite a bit (I’d guess from 20% to 40%) in light of this opinion today by the European Court of Justice official “that the U.K. can back out of its fraught decision to leave the trading bloc without permission from other members.” EU Court Throws Wrench Into Fraught Brexit Debate. Excerpt:

The opinion of the European Court of Justice official, which requires confirmation in a final court ruling, says the U.K. can unilaterally stop the process of leaving the EU. Brussels and the U.K. government alike have argued it could not. A final ruling is expected within the next few weeks. The court generally follows the official’s legal advice but there have been frequent exceptions.