RE:Austerity scenariosBiggest risk is not dilution, it is running out of cash. Period. From Financial Post:
“Aurora is in a precarious position as its cash needs are likely to exhaust the resources at hand, including roughly $500 million in capacity on the company’s credit and at-the-market facilities,” wrote Andrew Carter, cannabis analyst at investment bank Stifel Financial Corp in response to a Wednesday afternoon news report that speculated on impending layoffs.
“The rumoured reductions would manifest in roughly C$20 million in annual savings, though this pales in comparison to the C$160 million EBITDA loss we estimate for FY20,” he wrote.
“Unfortunately, 10 per cent in layoffs is not nearly enough expense cutting for Aurora to turn the corner in terms of operating profitability. It would be like putting a band-aid on a major artery wound when a tourniquet would be required to stem the bleeding,” said cannabis analyst Chris Damas, author of The BCMI Report.