- Aurora Cannabis shares are falling to new lows around C$1.65.
- If it loses extra ground, it may be categorized as a penny stock.
- The firm may opt to "reverse-split" its stock, but that has consequences as well.
ACB's stock price ha seen better days. Share prices of the Edmonton-based company have been extending their decline. At the time of writing, ACB trades at around C$1.65 in Toronto. Aurora's financial woes – known for a long time and exacerbated by the recent earnings report – are driving the stock down.
Canadian and other investors may begin looking at the marijuana firm's stock price at the New York Stock Exchange. There, it trades at around US$1.24. According to NYSE''s rules, if shares trade below one dollar for around a month, they may be delisted and downgraded to the "penny stock" category.
Falling out of the main exchange may further push the price lower. To avoid that, companies do a "reverse split" – or merge. For example, two ACB stocks may be combined into one, with the new equity worth double the price.
While such a move would prevent – or at least delay – the fall to penny category, it has consequences. The pot company would be admitting that share prices could further fall, painting a dark picture going forward.
At low prices, bargain-seekers may come in pick stock – if they believe sales and earnings can rise. The company's cost-cutting exercises have yet to prove their efficiency.
Aurora Cannabis Stock Price
Shares of weed companies have dropped alongside the broader stock market as fears of the coronavirus outbreak cause broad fears. However, the consumption of cannabis has room to rise in such a crisis.
See Aurora Cannabis has three (mostly coronavirus-related) reasons rise
Nevertheless, the picture on the chart is quite gloomy.
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