News – UK – What are Aphria and Tilray’s stock prices like before the merger?

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22nd February 2021, 16:40 GMT

Unpredictably, it doesn’t even begin to describe the performance of cannabis producers Aphria [APHA] and Tilray [TLRY] in February. The two stocks saw tremendous price moves, including some sharp declines due to an overvaluation sparked by the WallStreetBets hype

Tilray’s share price was announced on Jan. February at approx 11 USD opened by 11 It closed February at $ 63 91, an increase of over 250%, however, Tilray’s price gains proved unsustainable as the stock closed at $ 29 last week21

Aphria’s share price performed similarly.After trading around the CA $ 12 mark in February, the stock closed at CA $ 33 37 on May 10 Like Tilray, Aphria’s rally was unsustainable as stock trading on Friday the 12th It was close to the CA $ 20 mark on February 19 Closing February close to CA $ 25

Because of this volatility, cannabis was one of the losers in our Global Thematic ETF Screener 73% last week (as of 19 February)

For both Canadian cannabis producers, however, many factors play a role including a proposed merger of the two, a Democrat-controlled White House, and the prospect of improving profits

In December, Tilray and Aphria announced that they would merge, creating the world’s top-selling cannabis company by sales

Aphria shareholders will receive 08381 one Tilray share for every Aphria share they own, while Tilray shareholders will not adjust the deal, which is expected to close in the second quarter of 2021, with Aphria becoming a wholly-owned subsidiary of Tilray
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According to MarketWatch, Cantor Fitzgerald analyst Pablo Zuanic believes that investors looking to capitalize on the proposed merger should better buy Aphria Zuanic argues that Aphria is trading at a 51% discount and has set $ 25 target price for the Share, along with a $ 30 goal on Tilray

The merger is timely as it will strengthen the combined company’s ability to capitalize on potential US federal legalization, ???? Jason Wilson, cannabis banking and research expert at ETFMG, said, according to MarketWatch

Access to US markets will soon become incredibly important to Canada’s cannabis producers as the Democrats are now responsible for all three branches of the US federal government

During the campaign, the Biden-Harris government ran for a ticket that contained a pledge to decriminalize marijuana sales at the federal level

“Democrats will decriminalize marijuana use and reschedule it through federal executive action,” according to the Biden-Sanders Unity Taskforcecom recommendations posted on joebiden

“Democrats will decriminalize marijuana use and reschedule it through federal executive action” – Document made with recommendations of the Biden-Sanders Unity Taskforce

Public and political support for federal legislation has never been so great, According to The Verge, a recent Gallup poll shows 68% of Americans approve laws, while four more states approved cannabis reform laws in the November election

So far, 15 states have already legalized the drug, and New York is trying to legalize cannabis this year for tax revenue. In December, the House of Representatives passed the MORE bill decriminalizing marijuana use

How far the White House is ready to go remains uncertain Biden’s Task Force Document Reads “Decriminalization” Not “Legalization” However, with the Democrats in control of both the House and Senate, now may be the best time to pass laws

Certainly the latest quarterly results, which exceeded analysts’ expectations, were one of the main drivers of Tilray and Aphria price movements

On 17 In February, Tilray posted a net loss of $ 29 million, or two cents per share, topping Wall Street’s projected net loss of $ 014 a share / p>

Aphria posted an Adjusted EBITDA of $ 126m in its quarterly results ???? the seventh positive quarter in a row

???? Given an acceleration in regulatory changes and an increasingly favorable political environment, our proposed merger with Aphria will position the combined company as the world’s leading company with the lowest cost of production, leading brands and well-developed distribution network and unique partnerships? Tilray CEO Brendan Kennedy said in the earnings release

Kennedy also pointed to $ 78 million in tax efficiencies worth $ 7 millionwho would “generate significant shareholder value” as a result of the merger

D H Taylor, who writes on Seeking Alpha, points out that the two combined companies have a valuation of approximately $ 9 billion USD and adds this cautionary note:

“Think what a 9 billion valuation USD is required for a ‘normal’ company The combined companies would have a net profit of approximately 300 million Reach USD 9 billion Earn USD “

“Think what a 9 billion valuation USD is required for a “normal” business “- D H Taylor

Taylor warns that “none of the companies are consistently profitable” and sees “current valuations as not being pragmatic”

Taylor is right, and it’s something long-term investors need to consider before investing, but should federal cannabis laws be relaxed in the US? or even more individual states give the green light for recreational use â ???? Then momentum could see stocks rally even if that doesn’t align with the fundamentals of the newly merged company

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News – GB – What are the stock prices of Aphria and Tilray? – Merger?

Source: https://www.cmcmarkets.com/en-gb/opto/how-do-aphria-and-tilrays-share-prices-look-pre-merger