09:25:55 EDT Fri 29 Mar 2024
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Aurora Cannabis Inc
Symbol ACB
Shares Issued 1,089,513,408
Close 2019-12-27 C$ 2.50
Market Cap C$ 2,723,783,520
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Globe says Hexo tumbles as its equity offering drops

2019-12-30 07:10 ET - In the News

See In the News (C-HEXO) Hexo Corp

The Globe and Mail reports in its Saturday edition that Hexo ($2.10 (Canadian)) said on Thursday that it would raise $25-million (U.S.) by issuing 15 million new shares priced at about 14 per cent below the Tuesday closing price of its New York Stock Exchange-listed shares. The Globe's Jameson Berkow writes that Cantor Fitzgerald analyst Pablo Zuanic said the pricing represented a "massive" discount. Not only was the timing unusual, money managers say, but the double-digit discount on an offering that also dilutes the value of existing shares represents the latest challenge facing cash-strapped cannabis companies next year as other fundraising options become increasingly scarce. "The equity markets are completely closed to [cannabis] stocks and you could argue that the debt markets are closed as well," said Purpose Investments manager Greg Taylor. Hexo said it intends to use the money raised to advance "innovation strategies." Mr. Zuanic says, "We wonder about the need" for that money. Canopy Growth, Aurora Cannabis and Organigram Holdings have fallen in tandem with Hexo. Mr. Taylor says: "2020 is going to be the year of either mass consolidations or bankruptcies. It will be the survival-of-the-fittest year."

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