Tilray's Share Price - Morningstar Opinion'Morningstar' gave their opinion on Tilray's share price drop
Tilray: Shares Plunge On Dilutive Convertable Notes Offering, But magnitude is an Overreaction.
May 26, 2023
with another $22.5M possible for over-allotment. The proceeds will be used to partially refinance near-term maturities of the 5% convertible senior notes due 2023 and 5.25% convertible senior notes due 2024, of which $223 million and $138 million, respectively, were outstanding at the end of the fiscal 3rd quarter.
Shares fell about 21% on news in reaction to the new notes' dilution to existing investors. While the conversion price is a fraction of our fair value estimate, the small size of the offering limits the dilutive impact. As such, we don't expect a material reduction to our fair value estimates of $6.50 and Cdn $9.00 per share. We believe the share price reaction creates even more upside opportunity in the only Canadian licensed producer under our coverage that reached adjusted EBITDA profitably.