ACB Stock Price: Aurora Cannabis inc licking its wounds from five adverse developments
|- Aurora\s stock price is kicking off a new week after a significant sell-off.
- Five reasons are behind ACB's slump, and the stock trades close to the lows.
- Monday's four-hour chart is pointing to a potential bounce.
Aurora Cannabis' stock price is sliding due to the firm's financials – again – but contrary to one of the previous rounds, it fails to receive analyst support.
The drop of the marijuana company's shares is five-fold:
1( CEO exit: The company announced that Terry Booth and would be replaced by Executive Chairman Michael Singer as interim CEO. Booth painted a rosy picture that proved to be a pipedream. Aurora may have a hard time finding the next permanent boss amid its misfortunes.
Significant job cuts: The company has terminated around 500 full-time jobs or around 17% of its total headcount. While Wall Street often cheers cost-cutting exercises that include personnel, the deep reduction is pointing to acting at a lower scale. Indeed, Aurora is scaling down operations in Denmark and South America while focusing on its domestic market in Canada.
Impairment charges: Glen Ibbott, Aurora's Chief Financial Officer, has announced impairment charges of between C$190 to C$225 million in addition to write-downs worth between C$740 to C$775. ACB's stock price has previously suffered from the issue of the debentures, and any financial move scares investors.
Guidance: The Edmonton-based company's guidance for fiscal 2020, after these impairment charges, is to keep expenditures under C$100.That implies a potential loss, according to Andrew Carter, leading the team of analysts at Stifel.
Analysts: Carter has set to price target of C$1 for the firm – and he is not alone. At the time of writing, ACB's stock price is trading at $2.26, and Bill Kirk of MKM sees a slide to $2. Owen Bennett and Ryan Tomkins of Jefferies see potential help coming from Nelson Peltz, a hedge-fund manager. However, most analysts and investors remain pessimistic.
Aurora Cannabis Stock Price
Examining the four-hour chart of ACB's Canadian-traded stocks, the Relative Strength Index is still above 30 – outside oversold conditions. This implies further falls possible, especially as momentum turned south, and the equity is trading below the 50, 100, and 200 Simple Moving Averages.
The all-time low of $1.96 is the next level to watch on the downside. Resistance awaits at $2.41, $3.02, and $3.63.
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