Canopy Growth Is Eyeing Another Reverse Stock Split. Will It Be Enough to Light a Fire Beneath the Beaten-Down Pot Stock?
Canopy Growth's stock has continued to fall, prompting the company to proactively seek to retain access to capital markets.
Overview
Canopy Growth (NASDAQ: CGC) did a reverse stock split on Dec. 15, 2023. After that split, the stock fell by nearly 50% before there was a brief marijuana stock rally. Today, the shares are down by roughly 80% from their pre-reverse-split levels. And, notably, they are back below $1 per share. The company has to do something about this situation.
Major exchanges have rules that must be followed for a company to remain listed on the exchange. Often, maintaining a share price of at least $1 is a key requirement. Being on a major exchange not only makes it easier for investors to buy and sell stock but also allows a company to raise capital more easily by selling new shares. On top of that, being listed on a major exchange is a sign that a company operates a material business, which can help when working with banks or selling bonds. Being delisted is a major black eye, and it can have material financial implications for a business.
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Originally published at www.fool.com.