It was an ugly afternoon for Tilray stock, but far from its worst beating.
Tilray Brands Inc.’s share price dropped in the extended session Thursday after the cannabis company filed a convertible note offering to buy back older ones before they convert to stock, a month after it announced an all-stock acquisition of rival Hexo Corp.
Since Tilray went public in July 2018, the stock has logged six sessions where it has closed down more than 20%, the last being the stock’s worst one-day performance ever, on Feb. 11, 2021, when shares plummeted 50% after U.S. reforms on the legal status of cannabis slowed. In a statement, the company said the offering will result in lower interest payments and have “fewer covenant restrictions than our non-convertible debt options due to the conversion option value,” and would be less dilutive than a secondary offering of stock.Based on Thursday’s closing price, $172.5 million represents about 73 million shares. Tilray has about 618 million shares outstanding. At the end of February, the company reported having $165 million in cash and cash equivalents, $89.
The offering comes a little more than a month after the company agreed to buy peer Hexo HEXO, -5.65%. On April 10, Tilray reported after the close of markets it swung to a loss for the February-ending quarter and offered to acquire Hexo in an all-stock, $56 million deal expected to close in June.
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