HEXO Equities Warrants Exp 2 Apr 2024 T.HEXO.W.A

HEXO's 1.2 Billion for U.S Expansion

[quinlash]

Anyone still confused about the news that HEXO is positioning itself to raise upwards of 1.2 Billion should read over the News Release from the company a few times. 

What we know from the news is that the company is giving itself the option to raise these funds over a period of 25 months.  The company may, or may not, raise that much and the capitial raise may occur in smaller increments over the 25 month period. 

It was also clearly noted that the company is active on other merger and aqcuistion deals to aid in expanding the operation into the US for non-beverage partnerships etc

Link to 1.2 Billion News Release from HEXO
https://www.globenewswire.com/news-release/2021/04/15/2211308/0/en/HEXO-Corp-Announces-Filing-of-1-2B-Preliminary-Base-Shelf-Prospectus.html

What is NOT stated in the News Release is the price which shares will be sold NOR is the number of shares to be sold stated.  THEREFORE we can not say anything in regards to dilution at this point.

When HEXO discusses financing with a bank or underwriter they will discuss how much money they are seeking then work out the price per share at that point.  HEXO, in 2020, raised funds through the sale of shares OVER the price which shares were trading for on the open market.  Due to this fact we need to consider that HEXO has a strong business case to raise funds and it MAY BE possible that we will once again see the company issue some amount of shares at a price HIGHER than what they currently trade for. 

The higher the price the shares are sold for.... the less that need to be issued to raise capital.

All the best

Q