CGC - Why Is Canopy Growth (CGC) Stock Plunging 20% Today?
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Canopy Growth (NASDAQ:CGC) stock is falling on Thursday following an update that Constellation Brands (NYSE:STZ) has reached an agreement to eliminate its Class B shares.
This agreement was suggested by a committee made up of independent directors from Constellation’s Board. That has the company’s Board advising shareholders to vote in favor of eliminating its Class B shares.
Constellation Brands says that this agreement was reached with members of the Sands Family. If approved, it would result in Class B shareholders having to trade in their stock for cash or a mix of stock and cash. The company is offering up to $1.5 billion in cash, or one share of STZ stock and $64.64 in cash for each share of Class B stock converted.
So what does this have to do with Canopy Growth? Constellation Brands owns a large stake in the marijuana company. With the change in how its shares are listed, shares of CGC stock are sliding as well.
But there’s more to it than that. Canopy Growth has also announced a deal that has it exchanging notes with loan holders for CGC stock. This covers a total of $198 million in senior notes due in 2023.
It’s worth mentioning that this agreement includes Constellation Brands exchanging notes for CGC stock. This will see one of its subsidiaries acquire between 21,929,914 shares and 30,701,880 shares of CGC stock.
CGC stock is down 18.3% and STZ stock is down 3.1% as of Thursday afternoon.
There’s more stock market news that investors will want to know about below!
We’ve got all the hottest stock news that traders need to know about for Thursday! Among that is what has shares of Airbnb (NASDAQ:ABNB), Polestar (NASDAQ:PSNY), and Acuity Brands (NYSE:AYI) on the move today. You can find out all about these matters at the links below!
More Thursday Stock Market News
- Airbnb (ABNB) Stock Slumps After Analyst Slashes Price Target
- Why Is Polestar (PSNY) Stock Down 7% Today?
- Acuity Brands (AYI) Stock Gets Boost From Strong Q3 Earnings
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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