Cannabis Stocks Do Best Impersonation Of A Yo-Yo

cars on road during night time

Motley Fool reports July 29 ….

After notching two straight days of gains, on Wednesday marijuana stocks again obeyed gravity by falling Earthward.

The catalyst was a steep quarterly net loss from Aphria (NASDAQ:APHA), which not only pulled down that stock by 17% but also peers Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC), and Curaleaf (OTC:CURL.F), down a respective 9%, 4%, and 3% in late afternoon trading.

So what

Aphria’s fourth quarter prominently featured a heavy bottom-line loss of 98.8 million Canadian dollars ($73.9 million). That’s in stark contrast to the modest profit (CA$5.7 million, or $4.3 million) it booked in in the third quarter and far worse than analysts had estimated.

Although much of it was due to what are basically accounting moves (coronavirus-related impairment charges and a revaluation of convertible debentures), it starkly illustrates the persistent difficulty  marijuana companies have in simply turning a net profit.

On top of that, Aphria filed the regulatory paperwork to float up to CA$100 million ($75 million) worth of new stock. Dilutive stock issues are all too common in the marijuana business, and like those constant bottom-line losses, investors are losing patience with them.

More at https://www.fool.com/investing/2020/07/29/why-marijuana-stocks-are-plunging-today.aspx

Latest posts