HEXO's Stock Continues To Drop After Switching To NASDAQ

Cannabis producer HEXO Corp HEXO HEXO debuted on the Nasdaq Capital Market on Tuesday.

Based in Ottawa, the company completed the transfer of its stock exchange listing to the NASDAQ from the New York Stock Exchange. 

After announcing the pricing of a previously announced overnight marketed public offering of its 47.46 million units at $2.95 per unit last week, the company's stock price plunged 28% on Friday.

Shortly after, Cantor Fitzgerald’s Pablo Zuanic lowered the stock’s price target to CA$3.40 from CA$10 to address sectoral derating, increased share count and reduced visibility while reaffirming a “Neutral” rating.

According to the company, the total proceeds of $140 million from the offering will be utilized to fund the purchase price payable to the Redecan shareholders on the closing of the acquisition and for expenditures related to its U.S. expansion plans.

HEXO'S deal to acquire family-owned Canadian cannabis producer Redecan for $925 million in cash and stock was announced in May.

The analyst did say that “HEXO should be the largest Canadian cannabis seller” while questioning “how much of the proceeds will go to fund the U.S. plans.”

Price Action

HEXO’s shares traded 3.27% lower at $ 2.51 per share at the time of writing Tuesday.

Photo: Courtesy of Esteban Lopez on Unsplash

Posted In: cannabis industryCantor FitzgeraldNASDAQPablo ZuanicCannabisNewsPenny StocksSmall CapMarkets

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