Why Were Canopy Growth and Marijuana Stock Down?
Canopy Growth Corp (CVE:CGC, TSE:CGC) is starting off the week on a down note, this time falling by almost five percent after it announced today that it has sold $60.0 million worth of stock to a syndicate of underwriters led by GMP Securities and Dundee Capital Partners.
The marijuana stock collective as a whole was generally down on Monday, but Canopy Growth is the largest public producer and, therefore, is worthy of closer examination. The shares were sold at $10.60 a piece, down about 6.6% from the $11.35 closing price on Friday. (Source: “Canopy Growth Corporation Announces $60 Million Bought Deal Financing,” MarketWired, December 5, 2016.)
The deal involved 5,662,000 common shares being sold, but the underwriters retain the option to purchase an additional 849,300 shares at the $10.60 price for the next 30 days following the closing of the deal, which would increase the amount raised to $69.0 million. The deal is expected to close on December 22. (Source: “Canopy Growth Raises $60mm and Engages U.S. Investment Bank Cowen and Company,” New Cannabis Venture, December 5, 2016.)
Canopy Growth and marijuana stocks in general have been on a wild ride over the past few weeks. Since its late-July initial public offering (IPO), Canopy Growth has gained over 237%, though since mid-November the stock has somewhat slowed its momentous growth. The stock price peaked at $13.45 and fell to about $8.25 in November, its lowest price since the surge.
The stock price has yet to settle and continues to be rather volatile. While that hasn’t dissuaded some investors, others are skeptical over when marijuana stocks will peak, and when they will have plateaued. Stay with Profit Confidential for all the marijuana stock and Canopy Growth news you can handle. It’ll be a veritable green out.