RE:Questionable move by Aurora....mrmomo wrote: Not a s/h here, never was and won't be anytime soon. But i question their motives behind that move of repurchasing part of that debt. WHY they used up precious cash to buy back those non threatening convertibles. Especially afer having diluted current s/h with that awfully timed & teribly priced equity raise, which is also VERY questionable in my book. Are these conected in some way and did they actually severely dilute s/h just for that?
Don't get me wrong here, i think what Aurora is doing by restructuring should be a template to follow for every company in cannabis sector, especially heavily indebted ones like Canopy & Tilray. But Aurora already did the massive restruturing they needed to do and removed that toxic debt some time ago. So why buy back part of those convertibles, which carry a very advantageous rate of interest which no one can even dream of getting right now? Something doesn't add up here, from a financial sense perspective. Aurora has its problems but toxic debt isn't one of them at this time, losing market share & lack of siginificant revenue are.
Imo, Aurora didn't need to use up cash to reduce that debt, they need to find a partner to merge with to become bigger, increase sales and have economies of scale do their thing. If i was them, i'd find ways to supersize (and at the some time becoming more efficient!) by looking at some one like Cronos as a potential company to combine with, not waste time or resources by implementing unnecessary debt reduction measures. That's if they want to move on to the next round of the Cannabis Survivor Series and not get eliminated in this round.
GLTA
I will not search deeper because I don't have the time and it will not change anything for me.
I assume that the convertible price will never be reached so why pay the interest that I assume was quite high, probably not in the 4% but rather near 10%. This is just speculation since I will not search but if you have numbers, post them. Interest rate %? Price of the conversion? If ACB has to pay 15 millions a year in interest, it can be worth it to buy back.