Given that both companies are unprofitable, and we still do not know how both companies latest quarters have performed, TLRY stock might still drop from here. Aphria shareholders will receive 0.8381 shares of TLRY stock for every one share of APHA stock they own. Home sellers, particularly young people, are reluctant to move after obtaining low mortgage rates in the pandemic. This will help reduce their combined losses. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. Both stocks will, assuming the merger closes, end up in the same place. It's nice for investors who are interested in playing this sector and understand and accept all of its risks. This move by the two Canadian marijuana firms is a strong signal that the sector has begun to consolidate. Since then it has more than doubled to $18.36 as of April 29. 3 Stocks to Buy That Could Be the Next Green Energy Leader, Tilray Stock Will Fall Following the Aphria Merger on April 30. Is the merger a done deal? Visit a quote page and your recently viewed tickers will be displayed here. Current share. APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. Under terms of the agreement, Aphria shareholders will receive 0.8381 shares of Tilray for each Aphria common share, a 23% premium to Tilrays Dec. 15 closing price of $7.87. Earnings already have weighed on APHA stock, which dropped 14% that day and now is off 19% from pre-earnings levels. . For one, this will make the combined company the largest cannabis company by revenue, as described on page 5 of their investor presentation. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. After Tilrays (TLRY) shareholders voted in favor of the proposed merger Aphria (APHA) last Friday, the two cannabis companies announced today the completion of the transaction. At TLRY stock's current price, that would put shares at around $15.25. TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions. Moreover, vaporizing does not necessarily eliminate toxins. The delayed merger vote and the new quorum requirements have raised concerns. Meanwhile, Tilray had $271 million loss. Aphria(APHA)andTilray(TLRY)first announcedtheir proposeddealin December of last year. After all, there is always the possibility that it could fall through. The merger between TLRY and APHA is a reverse merger where Tilray, which is the smaller company between the two, would acquire APHA. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. Aphria (@aphriainc) said 99.38% of its shareholders voted to approve its merger with Tilray (@tilray). The big problem across the marijuana industry these days is production. lost 361 million CAD in the nine month period ending Feb. 28. TipRanks->. ET. Second, Aphria also now owns Sweetwater Brewing. This game-changing merger will ultimately make the new company more attractive for cannabis stock investors. But TLRY stock will likely fall once the merger goes through since it may take time for synergies to work. 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. Thats true, technically. Corey Goldman covers spot news, finance, capital markets and economics for TheStreet. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Per the companys earnings releases, low-margin distribution revenue has totaled nearly $290 million over the past four quarters. Last week, Aphria stockholders approved the deal overwhelmingly. Combined, [Aphria and Tilray] have a strong portfolio and other stuff, edibles, traditional dried flower, of course. The Motley Fool has a disclosure policy. So far, the special shareholder meeting has been postponed once, from April 16 to April 30. Tilray changed its bylaws in April to reduce its shareholder vote quorum to one-third of the voting power of the outstanding shares entitled to vote to approve the deal, instead of a majority of the voting power of the outstanding shares. Market Realist is a registered trademark. The latest among these states is New Mexico. As of Wednesday, 30th December 2020, market capitalization for Tilray and Aphria was at $1.31 billion and $2.195 billion respectively. have merged after months of negotiations, creating a company with a combined market cap of $3.3 billion. Copyright Simonsaid, "I want to thank all Aphria Shareholders for voting and approving the Arrangement. Its gained a whopping 90% so far in 2021. Offers may be subject to change without notice. Aphria shares closed down 0.5% and are also up 122% year-to-date. This merger can be considered as a light shining at the end of an unpredictable year like 2020. All Rights Reserved. Combined, Tilray and Aphria will make $874 million in revenue compared to $842 million by runner-up Curaleaf (OTCMKTS:CURLF). They project that the combined company will command a 20% market share via their subsidiaries and brands. That equals 632 million in losses (U.S. $505 million). The deal will mean that the combined company will be the largest cannabis operator (based on revenues). When two companies announce a merger, the two stocks tend to trade according to their merger ratio. Mar. In a deal that's widely considered as a "reverse merger", Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. Over the past 12 months, Aphria lost $163 million. For most investors then, the best course would be to wait, although I do expect the merger will eventually be approved. The deal is expected to close in the second quarter. Copyright Investors confidence will certainly be boosted by the merger once it goes through in 2021. But the pro forma revenue of $693 million cited in December includes two revenue streams that might not be as valuable. Aphria and Tilray Join Forces in Cannabis-Infused Mega Merger. 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. The U.S. cannabis landscape continues to grow as more states open up for business. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. Markets welcomed the news as a sign of consolidation in the marijuana industry where most players are making losses even on the EBITDA level. Type a symbol or company name. You must be 21 years of age or older to view the page. Im not sure its sales are as valuable as those elsewhere in the business. There is also the idea of selling the news. In other words, the market already anticipates that the merger will go through and a number of TLRY stock owners could sell out once the deal closing is announced. Type a symbol or company name. If you are looking at a better marijuana stock to buy between TLRY and APHA, choose APHA before the merger based on the merger arbitrage. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. The Cannabis ETF Create your Watchlist to save your favorite quotes on Nasdaq.com. To mark the new phase of its existence, Tilray has also changed its corporate logo. 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. The merger between Aphria and Tilray makes perfect sense. Aphrias shareholders have already voted and approved the merger on April 15. 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. Why Is Bed Bath & Beyond (BBBY) Stock Up 15% Today? This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. How will this merger between Tilray and Aphria affect investors in their cannabis stocks? 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. This is why Aphria's merger with Tilray is so critical. good natured Products Revenue Increases 65% In FY2020, The Green Organic Dutchman Gives Update On Operations, Aphria Shareholders Approve Tilray Merger, Do Not Sell My Personal Information (CA Residents Only). +5.49% Simply click here to get the full story now. Reportedly, Tilray hasnt been able to gather the required number of votes to get the merger approved. Reddit group WallStreetBets also pumped up some marijuana stocks. Email us at [emailprotected] with your questions/topic suggestions and we will get back to you! By using stonersrotation.com, you agree to these terms before purchasing from this website. 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. at a special meeting on Friday, according to media reports, paving the way for the creation of the world's biggest cannabis company measured by revenue. A deviation in stock prices can lead to merger arbitrage. However, I do believe that Tilray shareholders will likely approve the deal. Markets welcomed the news as a sign of consolidation in the. The stocks continued to rise in 2021 after the Senate runoff. 1125 N. Charles St, Baltimore, MD 21201. In terms of leadership for the combined company, Aphrias current CEO and Chairman, Irwin Simon will work in the same capacity. Then and now, Aphria's (now Tilray's) leadership has touted many benefits of the two companies coming together. Offers may be subject to change without notice. Finally, consolidation is a welcome step in the marijuana industry. 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. Learn More. Marijuana stocks have been very volatile over the last few months. 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 new company would trade under the ticker symbol TLRY, which is Tilrays current ticker. Ive been a fan of Aphria (NASDAQ:APHA) stock in the past. TipRanks->. 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). TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions. SPX, Aphria didnt do so in Q3, and that is a red flag. Then the company deactivated his account. Business-wise, the Tilray-Aphria merger is a win-win for both enterprises. Aphria and Tilray to Merge In $4 Billion All-Stock Pot Deal Aphria and Tilray agree to join forces, creating the world's biggest marijuana production and distribution company with a combined. 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). Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. Which is not exactly a cannabis-infused beer because it's sold in the States. THCX, A worker smiles as she shows cannabis plants at the Tilray factory in Cantanhede, Portugal April . Why Is Bed Bath & Beyond (BBBY) Stock Up 15% Today? The highly anticipated merger between Aphria (TSX:APHA)(NASDAQ:APHA) and Tilray (NASDAQ:TLRY) is set to close in Q2.Insiders anticipate that the merged entity could exist as soon as April. Growth looks tepid. Copyright 2023 MarketWatch, Inc. All rights reserved. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. Marijuana stocks and cannabis legalization have always had their destinies interwoven. 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. Each Aphria share will become 0.8381 shares of Tilray stock, on top of that companys existing share base. Aphria said that the reverse-acquisition of Tilray was approved by 99.38% of the shares represented at its shareholders' meeting. Here's The Marijuana Stock You've Been Waiting ForA little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom. Type a symbol or company name. The merger between Tilray and Aphria has been structured as a reverse merger where Tilray, which is the smaller company between the two, will acquire Aphria. Please verify your age to enter. Ive long been a skeptic toward Tilray, whose growth and revenue base hardly stand out among Canadian players. Aphria ( APHA ) and . This is going to be a good sweeping, comprehensive stock to play. This means be patient and look to average costs into TLRY stock. Thanks to the crazy Reddit-driven rallies in February, the spread between TLRY and APHA ballooned. The company is profitable, but not amazingly so. Above $13, that seems like a problem, and a reason to stay on the sidelines for now. May 3, 2021 8:29 AM EDT. The Motley Fool has a disclosure policy. Using pro forma Adjusted EBITDA, even accounting for the cost savings, the combined companys multiple sits over 50x. For Aphria and its peers, there simply have been too many outside factors that keep getting blamed: slow regulators, the novel coronavirus pandemic, air pockets in demand. Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. APHA . We appreciate their support, as we believe the business combination will create a Combined Company with a strong financial profile, low-cost production, market share leading brands, distribution network and uniquepartnerships. However, the company moved the meeting to April 30. The Tilray and Aphria merger has received regulatory approvals and APHA stockholders have also confirmed the merger. As I noted previously, as a standalone company, APHA looks better placed compared to TLRY given its better financials and lower comparative valuation. 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. Tilray has delayed the merger vote with Aphria. As such, these devices are not designed to cure or treat disease. The company will continue to trade on the Nasdaq Global Select Exchange under the symbol "TLRY" and will commence trading on the Toronto Stock Exchange under the symbol "TLRY" on May 5. The company says that the "new Tilray" will have synergies of over 100. In this video from Motley Fool Live from Dec. 22, longtime Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina break down the particulars of this intriguing deal. In December 2020, Tilray (TLRY) and Aphria (APHA) announced their reverse merger. Invest better with The Motley Fool. Aphria has agreed to acquire U.S. craft beer company Sweetwater Brewing, which makes cannabis-infused beverages, and Tilray is a partner of Anheuser-Busch InBev. You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. All Rights Reserved. Now, all eyes will be on the TLRY stockholder meeting later this month when the company takes up the merger vote. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. To make the world smarter, happier, and richer. Aphria (APHA) - Get Free Reportand Tilray (TLRY) - Get Free Report, two giants in the cannabis industry, on Wednesday revealed plans to join forces in an all-stock deal that will create the worlds biggest marijuana production and distribution company. So basically we can consider it a reverse merger. Aphria will also benefit from having a robust beverage partner and access to emerging European markets. Hopefully, the merger will find more than 100 million CAD in synergies to make this company profitable. But even after that sell-off, and a 41% fall from last months highs, this is not a value play. However, there has been a sell-off since then. From the initial momentum that saw these two marijuana stocks go up after the merger announcement, to the long-term effects itll have on the new companys balance sheet and operations, you can expect far-reaching effects. (See Aphriastock analysis on TipRanks). 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. Some experts however warn that while Tilray weed stocks may be a great buy in the near term, it may struggle to fully benefit from the U.S. marijuana market until pro-cannabis federal laws are established. If you've been keeping up with the marijuana industry, you'll notice a trend could be emerging. Aphria shareholders voted in favor of the proposed merger with rival Tilray, which will create the world's largest cannabis company by revenue. Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. Aphria management chalked the quarter up to an unforeseen and temporary pause in demand. Looking at the Canadian adult-use marijuana market, Tilray is strong in Quebec, while Aphria has a leading position in Alberta and Ontario. The cost savings will also lead to considerable improvements to the bottom line for the new company. On March 1, APHA stock closed at $18.76, while TLRY stock closed at $25.56. The move was widely expected after Aphria shareholders voted in favor of a deal by a wide margin, with a total of 99.38% of shares voted approving it on April 14. For example Aphria has -- when I glance over here I'm always looking at my cheat sheets, sorry. She is based in New York. The TLRY-APHA merger is expected to be completed in the second quarter of 2021. This merger between these two cannabis firms will see Tilray become the biggest player in the sector globally. In the middle of February, APHA stock was trading at around 0.41x what TLRY was trading at. has gained 9%. However, since then, both TLRY and APHA have fallen sharply amid the sell-off in marijuana stocks. Share via their subsidiaries and brands reportedly, Tilray hasnt been able to gather the required number of votes get! 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Motley Fool member Today to get instant access to our market insights, commentary, newsletters, breaking alerts... In the middle of February, the merger once it goes through since it may time... % and are also up 122 % year-to-date % in the marijuana industry days... Company Sweetwater Brewing be on the sidelines for now biggest player in the of! Or treat disease stuff, edibles, traditional dried flower, of course shareholders receive... Merger can be considered as a light shining at the Canadian adult-use marijuana market, Tilray stock will Following! Tilray & quot ; will have synergies of over 100 earnings releases, low-margin distribution revenue has nearly! Has been postponed once, from April 16 to April 30 that the company! Deal is expected to close in the year to date and a reason to stay the... $ 13, that seems like a problem, and richer and temporary in! Tilray was approved by 99.38 % of the two stocks tend to according... 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