Aurora Cannabis falls sharply as shareholders announce investigation
Company accused of violating securities law
A major Canadian cannabis producer has seen its share price plummet by 16.48 per cent after investors called in a law firm firm to investigate whether they were misled.
Investors in Aurora Cannabis have hired Glancy Prongay & Murray to investigate whether the company and its officers had violated federal securities laws.
Last week, the company released an earnings report in which it reported a 24 per cent sequential decline in revenue of C$75.3 versus C$98.9 in the previous quarter. Furthermore, it announced it was delaying plans to build further facilities in both Denmark and Canada, and would convert C$155 million of convertible bonds into stock in an effort to conserve cash.
On this news, Aurora’s share price fell by 17 per cent to close at $2.73 per share on November 15.
Investors have called in investigators to focus on whether the company issued false or misleading statements and failed to disclose pertinent information.
In January 2019 investors enthusiastically flocked to cannabis companies predicting that the legalisation of cannabis in Canada would reap great returns. These have not materialised however, with the Horizons Marijuana Life Sciences Index ETF and the ETFMG Alternative Harvest ETF, both down over 12 per cent in the last week alone.
FURTHER READING: Aphria shares gain 17 per cent after surprise Q1 profits
FURTHER READING: Two cannabis based medicines approved for use by the UK's NHS