Dilution @ Rock bottom prices. I thought that this was the best company in the sector. Everything was above average. It was one of the few companies that offered hope and thought was investable. Other companies are run by drunken sailors who are bent on diluting the shareholders and destroying them.
Today this company also surprised me. The stock is trading close to the all-time low after the merger and the company decides to dilute heavily using a big ATM selling program. These days the entire sector has been abandoned by the investors as there is little organic growth with massive losses with heavily bleeding of cash. The air has been coming out of all the stocks in the sector and is mostly abandoned and shorted.
One can debate the merits of the Hexo deal. It is too complex to understand as they are buying the debt and then it will get converted into partial ownership, in the meantime they get paid interest; the main plan could be that they might take over the company in future. HEXO has messed up big time by taking up so much debt that it has become insolvent.
In long term, it is hard to predict if the outcome it might be a good or bad deal for TLRy but in the meantime, the existing shareholders will be diluted and the stock is going to create new lows. Most of the takeovers in the sectors have been overpriced and some of them have been eventually written off.
There seems to be no quality management in this sector that you can really trust, they don't hesitate to throw the shareholders under the bus. This sector is not shareholder-friendly at all. You can trade this sector only. The short sellers love this sector.
This sector needs better management to become investable.