Aurora Cannabis Stock Could Be Delisted from NASDAQ
All that’s left for Aurora Cannabis to do to ensure it stays on the U.S. stock exchange in the near term is a reverse stock split. This corporate action would reduce the number of shares outstanding by merging shares. This does not change the share capital of a company, and there are no adjustments to the stock market value either. However, this would make each remaining share more expensive.
Aurora Cannabis was once a celebrated star of the cannabis industry. But after the hype surrounding cannabis legalization in Canada in 2018, followed by strong expansion, the mood in the industry has turned somber.
A look at Aurora Cannabis’ books has recently shown positive trends: In the second quarter of the current financial year, the company generated a positive EBITDA of $0.95 (CAD 1.28) per share, after a year ago there was still a minus of$5.28 (CAD 7.110) per share in the books had. Sales also developed positively and improved to $45.8 million (CAD 61.7 million).
The Aurora Cannabis stock then put a significant jump on the US stock exchange NASDAQ, but the share certificate has not been able to recapture an important mark – and that could be Aurora Cannabis’ undoing.
Read more about Aurora Cannabis stock, find out why the company could be delisted from Nasdaq, and read the latest and most important cannabis news with the Hemp.im mobile app.
Aurora Cannabis stock is less than $1
Namely, Aurora Cannabis’ stock is trading at less than $1, breaking the minimum listing requirement for the NASDAQ. Aurora Cannabis stock has steadily declined in value over the past two years, and the company’s market cap is now around $245 million.
A breach of the $1.00 per share floor requirement could delist Aurora Cannabis from the NASDAQ and result in a delisting of the stock.
A reverse stock split could ensure stay on NASDAQ
The company has few options to get back to the $1 mark. Given the subdued mood currently facing cannabis stocks on the stock market, positive corporate news is needed – but neither a merger nor a possible takeover or the entry of an investor – all news that usually have a positive influence on the share price – are in sight. Even the thoroughly positive business development in the past quarter did not give the share enough impetus to regain the important price limit.
Little support can currently also be expected from the political side: For some time, investors have been hoping for progress in the possible legalization process for cannabis in the important US market, but so far there has been no resounding success.
All that’s left for Aurora Cannabis to do to ensure it stays on the U.S. stock exchange in the near term is a reverse stock split
This corporate action would reduce the number of shares outstanding by merging shares. This does not change the share capital of a company, and there are no adjustments to the stock market value either. However, this would make each remaining share more expensive.
It wouldn’t be the first time in Aurora Cannabis’ history that senior management has taken this action. The company had already carried out a reverse split in a ratio of 1:12 in 2020 – investors who previously owned 12 Aurora Cannabis shares then only had one in their portfolio, but the price was significantly more expensive.
The continued price decline could prompt Aurora Cannabis to conduct such a corporate action again to avoid being delisted from the U.S. stock exchange.
The stock was down again at 8:02 a.m., Monday morning, February 20th
In Frankfurt trading, it fell by 4.1 percent to $0.91 (EUR 0.852). The number of Aurora Cannabis shares traded so far is 115 shares.
At a value of $4,600 (EUR 4,300), the share certificate reached its highest level in 52 weeks (03/25/2022). Aurora Cannabis stock is currently trading 80.179 percent below its 52-week high. On December 28, 2022, the share price fell to $0.82 (EUR 0.771), marking the current 52-week low. Aurora Cannabis stock is currently 10.487 percent above its 52-week low.
On September 21st, 2022, Aurora Cannabis presented the quarterly figures for the most recent quarter – closing date June 30th, 2022 – at the financial conference. In terms of EPS, a loss of -$3.51 (-4.72 CAD) per share was reported. Over the past year, Aurora Cannabis had generated -$0.28 (CAD 0.38) per share. Aurora Cannabis ended the past quarter with total sales of $50.22. Accordingly, the company reduced sales by 17.12 percent compared to the same quarter last year, in which $45 (CAD 60.59) had been generated.
Aurora Cannabis is expected to report Q3 2023 earnings and sales on May 11th, 2023. Experts forecast a loss of -$3.9100 (-5.268 CAD) per Aurora Cannabis share for the year 2023.
(Featured image by geralt via Pixabay)
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