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Aurora Cannabis falls on capital raise, reverse stock split

Published 2020-04-13, 11:35 a/m
© 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%.

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