Where Will HEXO Be in 1 Year?
We all saw what happened when the popular Canadian pot stock Aurora Cannabis (NYSE: ACB) chose to initiate a reverse stock split in May. Aurora's shares had started trading below $1 on the New York Stock Exchange (NYSE), which is against the trading compliance. To save its stock from getting delisted, Aurora opted for a 1-for-12 reverse stock split. It boosted the share price for a limited period, before the stock crashed this year. Aurora's consistent unimpressive quarterly results added to the disaster. The company's stock has slumped 59% so far this year, compared to the measly 1% gain of the industry benchmark, the Horizons Marijuana Life Sciences ETF.
Another Canadian pot company in the same boat as Aurora is HEXO (NYSE: HEXO), which received an NYSE listing warning in May when its shares fell and traded below $1 for 30 consecutive days. Now, to save itself from getting delisted, HEXO has proposed an 8-for-1 reverse stock split. This consolidation of its shares is subject to shareholder approval today, Dec. 11. In the face of mixed recent fourth quarter 2020 results and shares that are down 35% year to date, will this share consolidation help save the stock and give the company time to achieve profitability?
Image source: Getty Images.
Source Fool.com
