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Why HEXO Shares Are Crashing Today

TheMotleyFool

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Shares of HEXO (NYSE: HEXO) were 20.7% lower as of 11:11 a.m. EST on Thursday. The plunge came after the Canadian cannabis producer announced before the market opened that it planned to sell nearly 15 million shares and issue warrants for investors to buy nearly 7.5 million shares.

There's both good news and bad news with HEXO's stock and warrant offering. The bad news is that there's about to be more dilution in the value of existing shares. HEXO's new shares that will be sold represent nearly 6% of the company's total outstanding shares. The warrants, which have a five-year term, represent nearly 3% of outstanding shares.

Image source: Getty Images.

Source Fool.com

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