2024-01-29 16:28:09 ET
Summary
- Canopy Growth has reduced its free cash burn to CAD$67 million per quarter for an implied cash runway of five quarters against its current short-term liquidity position.
- Three institutional shareholders are looking to exit their positions, reducing their aggregate ownership from 13.4% to 2.5%.
- A high debt burden and elevated cash burn will drive continued near-term dilution for shareholders.
Canopy Growth Corporation ( CGC ) did not spare any time after its recent 1-for-10 reverse stock split in December to sell more shares. The cannabis company entered into an upsized private placement with several unnamed institutional investors to raise US$35 million through the sale of 8,158,510 shares at US$4.29 per share. This equity raise followed a prior abandoned attempt to raise US$30 million . While the upsized private placement is positive, three institutional shareholders are also looking to exit their positions in CGC. The selling hedge funds pre-sale collectively owned 13.4% of CGC with this set to drop to 2.5% post-sale. This institutional exit follows from when I last covered the ticker....
Read the full article on Seeking Alpha
For further details see:
Canopy Growth: Further Implosion Is Now A Matter Of When Not If