The stock of pot producers
rose on Friday after the private equity firm, which is the controlling shareholder of the company, announced that it will not sell shares when Tilray's IPO expires on Tuesday, January 15. The shares of the cannabis company were clouded by fears over possible sales of shares by Privateer Holdings, a Seattle-based private equity firm backed by billionaire investor Peter Thiel and starring Tilray boss Brendan Kennedy. By the close on Friday, Tilray stock (ticker: TLRY) traded five times its daily trading volume, up 19% to $ 96.
"Privateer Holdings strongly believes in Tilray's long-term global growth strategy and pioneering ways to shape the future of the legal cannabis industry," said Michael Blue, managing partner of Privateer, in a brief public statement. He said Privateer will not sell shares in the first half of 2019.
Privateer holds 77% of the outstanding shares of Nanaimo, Tilray, based in British Columbia. The private equity firm says it has raised around $ 200 million for investments in cannabis companies like Tilray. So far, so good. The $ 40 million Privateil Tilray claims to have spent on its investment now stands at $ 7 billion – not including the value of Privateer's absolute control over the pot producer.
"If we decide to redeem shares," Blue said he will do so in an orderly and targeted manner to maximize tax efficiency considerations for private investors, taking into account potential impact on Tilray's public free float. "
The US investment bank
(COWN) was Tilray's banker when the cannabis company went public in July for $ 17 a share and raised banker Tilray's stock price to $ 17 million. The operation cost Cowen about $ 1 million.
Although Tilray's volatile equities are well below the $ 300 peak they achieved when a Bitcoin-like frenzy seized the cannabis sector in September, Tilray's holdings and its rivals
(ACB) are rising for several days. The analysts of Piper Jaffray and Cowen had been behind Canopy and Tilray this week. In bullish recommendations that growers will overcome the production problems that have led to bottlenecks since the start of the sale pot for Canada on 17 October, sentiment has turned bad.
Tilray Bull has to make dizzying projections to recommend the stock here. With a market capitalization of nearly $ 9 billion, Tilray is valued at 200 times the annualized unprofitable amount in the September quarter.
And pot prices are falling fast. Friday, rival
(APHA) reported that the gross profit margin had dropped as the average selling price per kilo in Canada fell 8% to $ 6.54 during the November quarter. The average price of Tilray in September was $ 7.98. The Canadian provincial government wholesalers have told companies like Tilray that if legal sales on the black market of marijuana are to continue to fall, prices must continue to fall.
But sellers are likely to have ventured out of the sector after selling off in December over the quarter. Aphria also said his chief executive, Vic Neufeld, will resign. The news led to an end to the hostilities of Quintessential Capital Management, a hedge fund that has criticized Aphria's shares over the past month. Quintessential said it was about new projects.
Write to Bill Alpert at firstname.lastname@example.org