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ACB of Aurora Cannabis Inc.,
ACB,
The $ 125 million stock offer announced Tuesday night could prove to be a wise move, even if it will dilute existing holdings, according to Jefferies analyst Owen Bennett. The move is “not that surprising” and allows Aurora to capitalize on the huge gains his stock has enjoyed since Democrat Joe Biden won the 2020 US presidential election. “While arguably confirming that valuation current is too tight and also leading to further dilution, you also have to say that it is a wise move, especially with the possible opening of the US sooner or later. Without liquidity, gaining a foothold in this market will be very difficult, “Bennett said. Aurora shares slipped 14% before the news marketed and Bennett acknowledged that the dilutive capital increase” is a little tough on retail investors who bought the stock these last. days. ”Cantor Fitzgerald analyst Pablo Zuanic agreed.“ We certainly don’t blame management for taking advantage of the strong post-election crisis suffered by the action, ”he wrote. in a note to customers. Jefferies rates Aurora as an expectation, while Cantor rates it neutral. Shares have fallen 68% year-to-date, while Cannabis ETF THCX,
fell 14% and the S&P 500 SPX,
gained 9.7%.
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