Aurora Cannabis Secondary Offering Has Shares Up in Smoke

Aurora Cannabis Inc. (NYSE: ACB) stock tanked in Wednesday’s session on news that the company will raise capital with a secondary offering. The Canadian cannabis producer is looking to raise about $150 million by offering 20 million units at $7.50 apiece.

Each unit will be comprised of one common share of Aurora Cannabis and one-half of one common share purchase warrant. Each warrant will be exercisable to acquire one common share of the company for a period of 40 months following the closing date of the offering at an exercise price of $9.00 per warrant share

The underwriters for this offering are ATB Capital Markets and BMO Capital Markets. They have a 30-day option to purchase up to an additional 15% of the units being offered.

The company intends to use the net proceeds from this offering to fund growth opportunities and for working capital and other general corporate purposes.

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Excluding Wednesday’s move, Aurora Cannabis stock had underperformed the broad markets with a pullback of about 68% year to date. In the past 52 weeks, the share price was closer to 81% lower. However, in the past month shares are actually up about 67%, so it makes sense to capitalize on a secondary offering now.

Aurora Cannabis stock traded down about 19% to $6.69 on Wednesday, in a 52-week range of $3.71 to $42.96.

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