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Aurora Cannabis falls on capital raise, reverse stock split

Published 04/13/2020, 11:35 AM
Updated 04/13/2020, 11:40 AM
© Reuters. The Logo for Aurora Cannabis Inc., a Canadian licensed cannabis producer, is displayed on a screen on the floor of the NYSE in New York

(Reuters) - Aurora Cannabis Inc's (TO:ACB) (N:ACB) U.S.-listed shares fell nearly 14% in morning trade on Monday after the Canadian pot producer renewed an at-the-market offering under which it can raise as much as $350 million in equity capital.

The company said its board also approved a reverse stock split of 1:12 to boost its share price above $1, the minimum required to maintain a listing on the New York Stock Exchange.

Aurora's U.S.-listed shares were last trading below 80 cents.

Companies in the nascent marijuana industry had a rough 2019 and things are worsening this year, with many running out of cash at a time when the coronavirus pandemic has investors on the sidelines across all sectors.

Producers CannTrust Holdings Inc (TO:TRST) and James E Wagner Cultivation Corp (V:JWCAh) filed for bankruptcy protection two weeks earlier.

Edmonton, Alberta-based Aurora said on Monday it had about C$205 million ($146.8 million) cash as of March 31, including all the money it raised under the original at-the-market offering announced in May 2019.

Shares of other cannabis companies were also down on Monday with Tilray Inc (O:TLRY) down more than 8%, Hexo Corp (TO:HEXO) off 5% and Cronos Group Inc (TO:CRON) and Canopy Growth Corp (TO:WEED) down over 3%.

Latest comments

I had high hopes for the cannabis industry but i guess i a made a huge mistake. I invested in Canntrust and it went down and took my money with it. Does anyone know what happens when a company gets delisted what happens to investors monies? Cheers.
https://ca.finance.yahoo.com/news/canntrust-holdings-greenhouse-licenses-reinstated-122527909.html
Shareholders are the owners of the company. When a company goes bankrupt, the shareholders are the last to be paid compensation if any. All the creditors are settled first as listed in law of bankruptcy. The shareholders are not likely to get anything.
Up in smoke. I love news thats a year old.
Such an annoying cannabis stocks... maybe this will finally be the last thing that is detremetial to investors that Aurora does... we can only "hope" its up from here and the stock price will eventually go sky high
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