2 Marijuana Stocks Poised for a ComebackLINK
https://www.fool.ca/2021/09/06/2-marijuana-stocks-poised-for-a-comeback/ HEXO
If you have been following HEXO (TSX:HEXO)(NYSE:HEXO) stock, you might be surprised to see me talk about it here after a grueling selloff saw the stock decline by over 25% between August 19 to trade for just $3.05 per share at writing. Within an hour after markets closed on Thursday, August 19, the company announced that it was issuing new shares.
The equity offering would cause significant dilution for shareholders, triggering a panic-induced selloff frenzy that saw its share price drop.
HEXO announced the move, because the company’s management needed to raise capital to fund its acquisition of Redecan in a deal worth $925 million. HEXO’s management plans to pay $400 million in cash consideration and settle the balance in shares. HEXO has made several other acquisitions that, along with the deal for Redecan, can provide stellar revenue growth for the company in the next few months.
The rapid decline in its share price after the announcement might have been overdone. Buying its shares for a discount today could set you up for significant gains as the stock recovers.