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Cannabis Summary for Oct. 23, 2019

2019-10-23 20:09 ET - Market Summary

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by Stockwatch Business Reporter

The Canadian Securities Exchange Composite Index fell 1.09 points to 431.48 Wednesday. Hexo Corp. (HEXO) rose 12 cents to $3.51 on 9.71 million shares after arranging a $70-million financing of convertible debentures. While the market views the financing as a positive development, it comes just two weeks after shareholders punished the company for a less-than-rosy financial forecast. The company dropped its revenue expectation for the fiscal fourth quarter and withdrew its 2020 guidance. Specifically, Hexo reduced its revenue estimate for Q4 to $14.5-million, down from $16.5-million; the reduction sent the company's stock tumbling that day by $1.12 to $3.76.

Today, however, the company tried to regain investors' confidence through insider participation in the financing. Hexo chief executive officer and co-founder Sebastien St-Louis, as well as directors Dr. Michael Munzar, Vincent Chiara, Nathalie Bourque and Adam Miron, are included amongst the investors. The move makes for good optics, but Hexo did not specify how much each insider was investing. The investments also do not carry the same risk that investing in a simple common share financing would pose.

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