Sproutly Canada Briefly Prints All-Time High In Strong Overall Session

Benjamin A. Smith

Sproutly Canada Inc (CNSX:SPR) (OTCMKTS:SRUTF) sprinted to a new all-time trading high in an asterisk-filled trading session. With Canadian markets closed for the annual civic holiday, shares in the OTC market briefly touched $1.875/share USD off the opening bell. While that print was as much due to market illiquidity as it was temporary, the backstory behind the remaining session is worth pursuing.

Outside of the unusual opening print (which self-corrected instantaneously), there was no denying the strength in the underlying price action. Overall, Sproutly Canada finished at $0.65/share USD ($0.84/share CAD equivalent), up ↑16.07% on the session. Volume chimed-in at record OTC levels, at just under 296,000 shares traded, despite the main Canadian listing being closed. Furthermore, prices touched the $0.88-0.89 level of several occasions—a hair below the all-time Canadian listing high of $1.18 CAD equivalent—reached upon Sproutly’s first post-RTO trading day on July 9th.

Despite the incontrovertible demonstration of strength, lack of market liquidity was certainly a factor in today’s outcome. Anecdotal reports of abnormally large bid/ask spreads were observed, and perhaps the trading algos became confused without Sproutly’s parent CSE listing to guide them. Today was the first time shares traded on a standalone basis on the OTC.

It’s also possible that Sproutly Canada’s Early Warning Report disseminated Friday night helped “trick” algorithmic trading programs in “thinking” that the company was a takeover target by another suitor. In reality, the report was just a formality: Infusion Biosciences Inc. was issued 36,857,676 common Sproutly shares as partial payment for being acquired by the latter just days earlier.

Dr. Arup Sen describes what makes Sproutly’s water soluble APP Technology the best in-class

If strength was indeed triggered by such anomalies, it wouldn’t be the first time similar oddities have occurred. The phenomenon of inexplicable price dislocations is well-documented, and occasionally arise when one or more algos misinterpret news as material when it is not. I suspect that was the case today.

Either way, Sproutly was among the biggest cannabis winners in a session which saw most rise marginally. While cannot discount extraneous events for being responsible for today’s move, we have yet to uncover them.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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