{"id":14419,"date":"2023-05-26T23:12:25","date_gmt":"2023-05-27T03:12:25","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/tilray-stock-drops-nearly-20-after-convertible-notes-offered-to-help-pay-down-debt\/"},"modified":"2023-05-26T23:12:26","modified_gmt":"2023-05-27T03:12:26","slug":"tilray-stock-drops-nearly-20-after-convertible-notes-offered-to-help-pay-down-debt","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=14419","title":{"rendered":"Tilray stock drops nearly 20% after convertible notes offered to help pay down debt"},"content":{"rendered":"
\n

Tilray Brands Inc.\u2019s share price dropped in the extended session Thursday after the cannabis company filed a convertible note offering to buy back older ones before they convert to stock, a month after it announced an all-stock acquisition of rival Hexo Corp. <\/p>\n

Shares of Tilray
\n TLRY,
\n -21.19%<\/bg-quote><\/p>\n

TLRY,
\n -20.44%<\/bg-quote>
\n fell about 20% after hours, following a 2.5% decline to close the regular session at $2.36. Meanwhile, the S&P 500 index
\n SPX,
\n +1.30%<\/bg-quote>
\n finished Thursday up 0.9%. Should shares open Friday down that much and remain unchanged, however, it won\u2019t be the stock\u2019s first 20%-plus daily beating. <\/p>\n

\n

Since Tilray went public in July 2018, the stock has logged six sessions where it has closed down more than 20%, the last being the stock\u2019s worst one-day performance ever, on Feb. 11, 2021, when shares plummeted 50% after U.S. reforms on the legal status of cannabis slowed.<\/p>\n

Late Thursday, the company said it was issuing $150 million in senior convertible notes due in 2027, with underwriters Jefferies and B. of A. Securities getting a 30 -day option to offer an additional $22.5 million.<\/p>\n

In a statement, the company said the offering will result in lower interest payments and have \u201cfewer covenant restrictions than our non-convertible debt options due to the conversion option value,\u201d and would be less dilutive than a secondary offering of stock.<\/p>\n

Read: <\/strong>Up in smoke: $60 million marijuana startup co-owned by rapper was a Ponzi scheme, feds say<\/p>\n

Based on Thursday\u2019s closing price, $172.5 million represents about 73 million shares. Tilray has about 618 million shares outstanding. At the end of February, the company reported having $165 million in cash and cash equivalents, $89.4 million in long-term debt, and $223.1 million in \u201cconvertible debentures payable.\u201d<\/p>\n

The company said it was using a portion of the proceeds to buy back 5% convertible senior notes that come due in 2023, and 5.25% ones due in 2024, and the rest for general corporate purposes. At the same time, Tilray said that with \u201ccertain holders\u201d of the 2023 and\/or 2024 notes, it will buy back \u201ca portion of such notes on terms to be negotiated with such holder.\u201d<\/p>\n

<\/p>\n
<\/p>\n
<\/div>\n<\/figure><\/div>\n

The offering comes a little more than a month after the company agreed to buy peer Hexo
\n HEXO,
\n -12.82%<\/bg-quote>.<\/span>
\n On April 10, Tilray reported after the close of markets it swung to a loss for the February-ending quarter and offered to acquire Hexo in an all-stock, $56 million deal expected to close in June. <\/p>\n

Tilray shares, which had closed April 10 up 5.4% before any of the announcements were made, closed down 8% the next session. Meanwhile, shares of Hexo had surged 30.2% on April 10 before the announcements, and dropped 26.8% during the April 11 session, according to FactSet data.<\/p>\n

Read:<\/strong> Tilray plans to buy Hexo, in the latest consolidation in Canada\u2019s struggling pot industry. Analysts ask \u2018Why now?\u2019<\/p>\n

At Thursday\u2019s close, Tilray shares were down 12.3% year to date, compared with an 8.1% gain on the S&P 500
\n SPX,
\n +1.30%<\/bg-quote>.<\/span>
\n Hexo shares are up 15.8% for the year.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Tilray Brands Inc.\u2019s share price dropped in the extended session Thursday after the cannabis company filed a convertible note offering to buy back older ones before they convert to stock, a month after it announced an all-stock acquisition of rival Hexo Corp. 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