[ad_1]
Cannabis stocks have been on fire since the U.S. election but saw turmoil on Tuesday.
AFP / Getty Images
Aurora Cannabis Inc. plans to sell more shares after big gains in recent days, pushing the share price down more than 15% at the end of Tuesday.
Aurora ACB,
ACB,
said he expects to charge $ 7.50 for a share of the company along with a warrant that will allow the buyer to purchase another share for $ 9 within 40 months of closing. The company plans to raise $ 125 million in the offer, according to its announcement. After falling more than 25% in Tuesday’s trading, Aurora closed at $ 8.30 a share, for a market cap of around $ 1.37 billion; after the announcement, the shares fell to around $ 7.
See also: Cannabis rally takes a breather as mediocre profits make gains seem like overkill
The latest plans for a stock offering and violent price move are just another bend in Aurora’s roller coaster trail in public markets over the past two years. The company has jumped to valuations of more than $ 10 billion amid the legalization of marijuana in Canada in 2018 and expectations of a massive market for marijuana, but disappointing performance through 2019 has sent markets plunging. stocks until Aurora was forced to perform a reverse 12-to-1 stock split to prevent her stock from being written off.
Shares received a boost from last week, after four US states decriminalized cannabis and Joe Biden appeared to win the presidency, something legal pot supporters as well as cannabis investors have taken as good news for federal legalization in the United States. after that the results look solid, and Aurora’s prices have more than doubled.
Lily: With Election Day sweep in four states, sales of recreational pots will soon reach one-third of Americans
The company, however, revealed why its shares struggled earlier this week. In an earnings report Monday morning, Aurora revealed losses of more than C $ 100 million in its first fiscal quarter, following a net loss of more than C $ 3 billion in its previous fiscal year, and detailed a multi-million dollar payment to the UFC to end a CBD Partnership with the Ultimate Fighting League.
Read more: As pot stocks explode in hopes of legalization in the United States, Canadian cannabis companies fight for growth
Aurora shares rose further on Monday, but fell sharply on Tuesday after analysts commented on the earnings report.
“The Aurora share price at the time of writing this report has risen 135% since day-end Wednesday. Some may look at this performance, which also included gains of over 20% at one point in intraday today, and assume a significantly improved fundamental outlook and strong quarterly numbers, ”Jeffries analyst Owen Bennett wrote in a note Tuesday morning. “That’s not the case, with Q1, for us, which doesn’t really stand out as anything special or too encouraging.”
Aurora’s prospectus suggests that he is looking to sell around 16.67 million fresh shares, along with warrants for the same amount, in a free float that has been reduced to around 121.5 million shares by the reverse split. If all the warrants were exercised, the free float would increase by more than 27%.
[ad_2]
Source link