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by Stockwatch Business Reporter
The Canadian Securities Exchange Composite Index rose 7.21 points to 379.61 Friday, ending the week up 7.6 points. Quebec-based Hexo Corp. (HEXO) fell 47 cents to $2.10 on 7.42 million shares after arranging a $25-million (U.S.) financing. Through the financing, Hexo will issue 14.97 million shares to institutional investors at $1.67 (U.S.) a share. (That compares with the $1.96 (U.S.) that Hexo was trading at on Nasdaq before announcing the financing.) As well as the shares, the investors will be issued half a warrant with each share, exercisable at $2.45 (U.S.).
It is no secret that as a result of increasingly hefty losses Hexo is in a tight spot financially. The company reported a loss of $62.4-million in its fiscal first quarter (for the period ending Oct. 31, 2019), which was marginally worse than its $56.6-million loss in the quarter immediately before. With an obvious need to reduce spending, on Oct. 24, Hexo laid off 200 employees, including its chief manufacturing and marketing officers. That was about a 20-per-cent reduction to its staff. The company's chief executive officer and co-founder, Sebastien St-Louis, described the cuts as necessary "to ensure the long-term viability of Hexo."
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