A week ago, we told you about the swift growth of such cannabis companies as  Canopy Growth, Tilray, OrganiGram Holdings, Aphria, Aurora Cannabis, and HEXO. To go on with the topic, today we’ll give you more details about one of them called Tilray.

What’s going on with Tilray stocks?

On Wednesday, December 16th, the stock price of a Canadian company, registered in the USA and called Tilray (NASDAQ: TLRY) grew by 19.41% to 34.63 USD each. The growth was provoked by the most interesting news: Bloomberg revealed that Tilray and Aphria had agreed on merging. We’ll stop on the details a bit later.

However, on December 17th, just before the report on the fourth quarter of 2020 was to be published, the quotations changed the direction and dropped by 9.01% to 31.51 USD. On the next day, when the quarterly report was presented to the public, the decline went on, and the price reached 27.1 USD per stock, which is a decline of 14%.

The main things from the report

The Canadian cannabis company managed to surprise both Wall-Street analysts and its own investors: the October-December statistics were beyond expectations. Let’s compare the results to those of Q4, 2019:

  • Revenue – 56.56 million USD (+20.5%)
  • Net loss – 2.95 million USD (-98.6%)
  • Net loss per share – 0.02 USD (-99.1%)
  • General and administrative spending – 22.6 million USD (-47.24%)
  • International sales of medical cannabis – 11.67 million USD (+191%)
  • Recreational cannabis sales in Canada – 25.36 million USD (+49%).

Details of merging with Aphria

Analysts say that Tilray has little chance for a successful independent future, so they have no doubts that the merger will happen. By the current plan, 60% of the stocks of the joint entity will belong to Aphria. Moreover, its director-general Irvin Simon will lead the new company.

Tilray is known better among individual consumers, hence the joint entity will have this name. The parties think that the merger will save them up to 78.7 million USD of annual expenses and increased the yearly revenue to 732 million USD.

Moreover, their part of both Canadian and international markets will grow. Rivalry with Canopy Growth, the leader of the segment, will become more equal.

Why did Tilray’s growth change for a decline?

The market got excited about the merger with Aphria: the stock price of Tilray jumped up by 19.41%. However, the report on Q4, 2020, though better than forecast, failed to make the market less skeptical.

Analysts say that the only chance of Tilray for a successful future is the merger with Aphria. The best proof that investors hardly believe in Tilray is the decline in its quotations right before and after the report.

However, there’s no official announcement of the merger, so we’ll have to be patient. Check for our new articles not to miss anything important.

Material is prepared by

He is the guru of searching for and demonstrating hidden opportunities and insights of the market. He writes about everything that might be of interest to the investor: stocks, currencies, indices, and various business spheres. Has been “in” since 2019.