STZ - Why Canopy Growth Stock Is Tanking Today
Shares of Canopy Growth (NASDAQ: CGC) tanked on Thursday morning, and were trading 19.7% lower as of 11:04 a.m. ET. That decline was driven by its announcement after the market close on Wednesday that it will exchange $198 million in convertible notes for a combination of stock and cash.
This deal was struck with some holders of the Canadian cannabis producer's senior convertible notes, notably including Greenstar Canada Investment Limited Partnership, a subsidiary of Constellation Brands (NYSE: STZ) . Canopy will provide $2.35 million in cash and offer stock to the noteholders at a price between $2.50 per share and $3.50 per share.
The main reason that Canopy Growth is down so far on Thursday is that the company plans to issue more than 34 million new shares as part of the exchange. This will dilute the value of the marijuana stock .
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Why Canopy Growth Stock Is Tanking Today