Why Canopy Growth Shares Jumped Then Dropped Today
Canopy Growth (NASDAQ: CGC) shares have been on a roller-coaster ride so far this month. The stock seems to be on that same ride today. Initially the stock rebounded after dropping 10% yesterday. It jumped almost 11% in early trading, but reversed course with shares down by 10.6% as of 11 a.m. ET. The move comes as investors are digesting the company's announcement of a new capital raise.
Shares of the Canadian cannabis company are still up about 100% in just the last month, though that is after a significant drop from its recent peak.
Some of that drop occurred after investors had a negative reaction to news that Canopy would be selling shares in a private placement offering that will raise as much as $50 million for the company. Private placement share offerings aren't available to the broader market. Though the shares are sold to accredited investors, common stock shareholder ownership is diluted in the process.
Source Fool.com
