Proactive Investors - Tilray (TLRY) Brands, Inc shares sank 21% to $1.87 in US trading on Friday after the cannabis company announced a $150 million convertible note offering to buy back older ones before it converts to stock.
After Thursday’s close, Tilray said it was issuing $150 million in senior convertible notes due in 2027, with underwriters Jefferies and BofA Securities getting a 30-day option to offer an additional $22.5 million.
The offering will result in lower interest payments and have “fewer covenant restrictions than our non-convertible debt options due to the conversion option value,” and would be less dilutive than a secondary offering of stock, the company stated.
The announcement comes just a month after Tilray revealed an all-stock acquisition of rival Hexo Corp (TSX:HEXO).
Based on Thursday’s closing price, the offering would involve the company issuing about 73 million shares, in addition to the 618 million shares Tilray currently has outstanding.
The company reported that it had $165 million in cash and cash equivalents, $89.4 million in long-term debt and $223.1 million in convertible debentures payable, as of the end of February 2023.
This would be the sixth time the company’s stock has fallen more than 20% in a single trading day since Tilray went public in July 2018.
Shares of Tilray Brands have plummeted about 60% over the past 52 weeks.