These 3 industries could be completely disrupted by data analytics. In a research note, Bottomley told investorsthat while he believesthe companys3Q "signals a number of red flags" that could impact most cannabis operators, he is downgrading Aphriaas the stockis trading at 97% of the impliedtransactionprice with Tilray. Tilray ( TLRY) - Get Free Report and Aphria ( APHA) - Get Free Report said Monday they had completed their merger, creating the world's largest cannabis company by revenue . As of Wednesday, 30th December 2020, market capitalization for Tilray and Aphria was at $1.31 billion and $2.195 billion respectively. Even with a sharp pullback of late, APHA has nearly quadrupled from where it sat in early March of last year. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. That equals 632 million in losses (U.S. $505 million). Now, all eyes will be on the TLRY stockholder meeting later this month when the company takes up the merger vote. On the date of publication, Vince Martin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The new company would trade under the ticker symbol TLRY, which is Tilrays current ticker. However, for the merger to be confirmed, it would have to be approved by TLRY stockholders. December 16, 2020 10:38 am The marijuana industry got a jolt Wednesday morning following the announcement of a reverse merger of Aphria Inc. ( NASDAQ: APHA) and Tilray Inc. ( NASDAQ: TLRY). In a deal thats widely considered as a reverse merger, Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders, the companies said. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. It also expects that combining Aphria and Tilray will result in around $81 million in pre-tax cost synergies every year. Tilray's merger with Aphria, announced in December and set to close in Q2, will create the largest cannabis company. Canadian operators desperately need consolidation amid an ongoing supply glut. But TLRY stock will likely fall once the merger goes through since it may take time for synergies to work. Simonsaid, "I want to thank all Aphria Shareholders for voting and approving the Arrangement. At the same time, Im not sure its the best deal for Aphria, even if current APHA shareholders will own 62% of the combined company. 2023 InvestorPlace Media, LLC. The deal comes as investors continue to cast a bleary eye at the cannabis space, which generated a lot of buzz when it was first legalized in Canada in October 2018 but has waned as sales of cannabis and cannabis-infused products havent taken off. Tilray, Inc. and Aphria, Inc. APHA. quotes delayed at least 15 minutes, all others at least 20 minutes. On Monday, Tilray's shares closed 7.2% lower, against the 0.3% rise of the S&P 500 index. It's worth taking a look at. May 3, 2021 8:29 AM EDT. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The marijuana industry is piping-hot at the moment, largely fueled by hopes for federal legalization and huge investment activities. But CC Pharma actually in the most recently reported Aphria quarter, it was responsible for more than half of Aphria's sales, which tells you something about that market. Making the world smarter, happier, and richer. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. To make the world smarter, happier, and richer. There will be a chance to buy TLRY cheaper down the road. SPX, Aphria shareholders will end up owning 62.1% of the combined company. THCX, Tilray and Aphria merger details The merger between Tilray and Aphria has been structured as a reverse merger where Tilray, which is the smaller company between the two, will. Aphria (APHA) and Tilray (NASDAQ:TLRY) are merging.Combined, the two companies are likely to save money - the main focus of the press releases - but it will take some time until those savings . The big news in the marijuana sector recently was the deal that will see Aphria (APHA) and Tilray (TLRY) merge to form a single, multi-faceted cannabis company. Stoners Rotation is an ecommerce for smoking devices and accessories. She is based in New York. TipRanks->. Is there still an arbitrage opportunity available before the merger is complete? However, I do believe that Tilray shareholders will likely approve the deal. Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray (TLRY). Offers may be subject to change without notice. Through Tuesdays close, Tilray shares have fallen 54% in 2020, while Aphrias have risen 56%. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. Current share. Locked in or trapped? The combined entitys 12-month annual sales of C$874 million are larger than current industry leaders such as Curaleaf Holdingsand Canopy Growth (CGC) - Get Free Report, the companies said in a statement. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Since the merger between Aphria ( APHA) and Tilray ( TLRY) was announced on December 16, 2020, the two stocks have traded apart and resulted in a somewhat bizarre situation. All Rights Reserved. The first quarter of 2021 has come to an end and it was certainly one to remember for the top cannabis stocks in the market. What's Next for Tilray Now That Its Merger With Aphria Is Complete? Unfortunately, at this point in the growth of Canadian cannabis, its pretty much impossible to take managements word for it (even though I do respect Aphria head Irwin Simon). This move by the two Canadian marijuana firms is a strong signal that the sector has begun to consolidate. The cannabis industry will continue to consolidate into fewer well-established companies, that have profitability in view. Market Realist is a registered trademark. So that's an encouraging development. Tilray Has 64% Upside After "Perfect Match" Merger, Analyst Says, The IRS Is Urging Millions of Early Filers to Amend Their Tax Return, 1 Warren Buffett Index Fund Could Turn $100 Per Week into $1 Million, 2 Stocks That Could Join Apple, Microsoft, Amazon, and Alphabet in the $1 Trillion Club, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. I think that's a good move because I think Tilray has a slightly stronger brand name and recognition. The two companies have identified 100 million CAD (US$80 million) in synergies over the next 12 months. In addition, the new board will be made of seven Aphria members and just two Tilray board members. Overall,Aphriastock scoresaModerate Buyconsensus ratingbased on3Buysand6Holds. Looking at the ratio, APHA's stock price was 0.734x of TLRYs stock price. Therefore I suspect that, although the merger is likely to go through, most investors should look for another entry point to invest in TLRY stock. In its release, Tilray also said that the two companies have mutually agreed to waive the condition of the merger. Hopefully, the merger will find more than 100 million CAD in synergies to make this company profitable. No wonder both the stocks rallied after the merger was announced. TLRY, Why is it delayed and has it been confirmed? In the all-stock merger, Aphria shareholders will receive 0.8381 shares of TLRY stock for each share of APHA they own. shareholders voted to approve the Canadian cannabis company's proposed merger with Aphria Inc. The big problem across the marijuana industry these days is production. Written by But Aphria, they bought not long ago SweetWater Brewing. In using this website you accept the terms of service and are responsible for complying with all laws and regulations, including applicable local laws. LEAMINGTON, Ontario & NANAIMO, British Columbia-- ( BUSINESS WIRE )--Aphria Inc. (" Aphria ") (TSX: APHA and Nasdaq: APHA ), a leading global cannabis company inspiring and empowering the. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. *Average returns of all recommendations since inception. First of all, economies of scale. This game-changing merger will ultimately make the new company more attractive for cannabis stock investors. Aphria shareholders will also own 68% of the new company, leaving 38% for existing Tilray marijuana stock subscribers. Apr 17, 2021 04:58AM EDT. The Motley Fool has a disclosure policy. At TLRY stock's current price, that would put shares at around $15.25. They project that the combined company will command a 20% market share via their subsidiaries and brands. December saw Tilray and Aphria announce that they will merge, creating the world's biggest cannabis company by revenue in the process. Over the past 12 months, Aphria lost $163 million. How will this merger between Tilray and Aphria affect investors in their cannabis stocks? These symbols will be available throughout the site during your session. Overall, Tilray stock scores a Hold consensus rating based on 1 Buy, 8 Holds, and 1 Sell. Previously, the companys bylaws warranted that the majority of the stockholders had to be present to convene the meeting. The stocks continued to rise in 2021 after the Senate runoff. Under the terms of the proposed deal, Aphria shareholders will receive 0.8381 of a Tilray share of class 2 common stock for each Aphria share owned. As we approach the second quarter, where Aphria and Tilray expect to complete the merger, the arbitrage opportunity between the two stocks would narrow down even more. Then and now, Aphria's (now Tilray's) leadership has touted many benefits of the two companies coming together. Meanwhile, some of the claims being made about the merger arent quite on point. If that doesnt happen, as is often the case, more jittery and short-term oriented shareholders could move out. However, the arbitrage opportunity has since come down greatly. According to executives from both Aphria and Tilray, the merger is targeted at cost savings and creating synergy. Please verify your age to enter. Per the companys earnings releases, low-margin distribution revenue has totaled nearly $290 million over the past four quarters. Since th Canopy Growth (NASDAQ: CGC), a top weed stock and leading cannabis producer and distributor has just added a new name to its growing Cannabis stocks have been experiencing an ecstatic high since the final quarter of last year. The merger arbitrage has come down heavily over the last few weeks. The U.S. cannabis landscape continues to grow as more states open up for business. Again, relatively speaking, you're not talking Philip Morris (PM 0.46%) or Exxon (XOM -1.16%) here, these are relatively small companies. Last week, BofA Securities analyst Heather Balsky initiated coverage of the stock with a Buy rating and a $23.00 price target (26.2% upside potential). TipRanks->. But again relatively speaking, they're going to be a big player in marijuana, they're going to be hard to ignore, they're going to be the largest Canadian marijuana company by far. If the deal goes ahead, the two companies will operate under the Tilray brand with Aphrias current CEO, IrwinD.Simon, leading the new entity. Talking of marijuana stocks, they have started to look very overvalued at their peaks even if we discount all of the positives. Cannabis stocks traded up this week, following news of the merger between Aphria (NASDAQ: APHA) and Tilray (NASDAQ: TLRY ). As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.". Type a symbol or company name. 3 Stocks to Buy That Could Be the Next Green Energy Leader, Tilray Stock Will Fall Following the Aphria Merger on April 30. Aphria (@aphriainc) said 99.38% of its shareholders voted to approve its merger with Tilray (@tilray). On March 1, APHA stock closed at $18.76, while TLRY stock closed at $25.56. These symbols will be available throughout the site during your session. This is going to be a good sweeping, comprehensive stock to play. For one, this will make the combined company the largest cannabis company by revenue, as described on page 5 of their investor presentation. As for APHA stockholders, they will get 0.8381 Tilray shares for each Aphria share that they hold. Finally, consolidation is a welcome step in the marijuana industry. Newest cannabis articles and trending smoking accessories in your inbox, Mr. Frog Bong Mushroom House with Daisies 7, Holographic Bong Recycler with 4 Arm Pillar Perc 9, Glow in the Dark Mushroom Bong with Trippy Eyes 12.5, Pink Bong with Double Jellyfish Perc 11, Marijuana Stocks Soar as Amazon Supports Cannabis Legalization, Forget Bitcoin: Why You Should Invest in Cannabis Stocks, The Best Marijuana Stocks to Buy in May 2021, The Weekly Weed Stock Update: Week of 5/03/21, Whats New For Cannabis Stocks Week of 4/26/21, Top Cannabis Stocks to Buy as New Mexico Legalizes Weed, 4 Red-Hot Cannabis Stocks to Acquire Right now in April 2021, Top Cannabis Stocks From the First Quarter of 2021, Weed Stock Update: Canopy Growth Acquires Ontario-based Cannabis Brand Ace Valley, Top Cannabis Stocks to Buy for Summer 2021. The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). Some investors might want to wait to see if the merger goes through. All told, nothing here really stands out. 1125 N. Charles St, Baltimore, MD 21201. And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution. APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. You must be 21 years or older to view and purchase products featured on this site. Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. Tilray (NASDAQ:TLRY) shareholders will vote on the all-stock merger with Aphria (NASDAQ:APHA) on April 30. Invest better with The Motley Fool. There will also be significant. With Aphria profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis and Tilray hitting that bogey in Q4, the reduced costs should get the combined company into net profitability and positive free cash flow. Based on April 16 closing prices, APHA trades at 0.822x of what TLRY trades at, which is similar to the merger ratio. Marijuana stocks surge as NY Governor says state legalization is close. lost 361 million CAD in the nine month period ending Feb. 28. 2023 TheStreet, Inc. All rights reserved. You can go short on Tilray stock and long on Aphria stock to benefit from the merger arbitrage. A worker smiles as she shows cannabis plants at the Tilray factory in Cantanhede, Portugal April . Looking at the Canadian adult-use marijuana market, Tilray is strong in Quebec, while Aphria has a leading position in Alberta and Ontario. Anheuser-Busch CEO on the Bud Light backlash: We never intended to be part of a discussion that divides people, Mark Zuckerbergs total 2022 pay rose because of the increased use of private aircraft, Elon Musk tells Tucker Carlson hell create TruthGPT chatbot to counter AIs liberal bias, Court tosses Berkeleys first-in-nation ban on natural gas in new construction. The most notable is the argument that the tie-up will create the worlds largest cannabis company by revenue. Both stocks will, assuming the merger closes, end up in the same place. The new company will trade under Tilrays ticker on the Nasdaq, and Aphria shareholders will own 62% of Tilrays stock under the terms of the transaction, which was characterized as a reverse acquisition of Tilray, the companies said. Whether or not Tilray 2.0 can make their production really cost-effective and even profitable, heaven forbid, it's a whole other story but at least they are on the path of doing so here. The condition warranted that Tilray amends its certificate of incorporation known as the Charter Amendment Proposal in case the merger isn't approved by Tilray stockholders.
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