HEXO Stock Plunges On $140M Public Offering Announcement Ahead Of Transfer To NASDAQ

HEXO Corp HEXO HEXO announced Friday the pricing of a previously announced overnight marketed public offering of its 47.46 million units at a price of $2.95 per unit.

The total proceeds from the offering amount to $140 million before deducting underwriting commissions and offering expenses.

Under the offering, each unit will be comprised of one common share of the company and one half of one common share purchase warrant, allowing the acquisition of one Hexo’s common share at $3.45 per warrant share in five years following the closing.

A.G.P./Alliance Global Partners and Cantor Fitzgerald Canada Corporation agreed to act as lead underwriters and joint book-runners for the transaction. In addition, ATB Capital Markets Inc. is acting as co-manager for the offering.

In addition, the underwriters have a month to buy up to an additional 7.12 million Hexo's units offered in the offering on the same terms and conditions.

The move follows the company’s recent announcement that it has applied to transfer its U.S. stock exchange listing from the New York Stock Exchange to the Nasdaq Stock Market. The transfer is expected to take place on Monday, Aug. 23, following Nasdaq’s approval.

The Canadian cannabis giant said that it plans to utilize the proceeds from the offering to fund the purchase price payable to the Redecan shareholders on the closing of the Redecan acquisition and for expenditures in relation to the Company’s U.S. expansion plans.

Price Action: Hexo’s shares traded 24.5313% lower at $2.4150 per share at the time of writing, Friday morning.

Photo: Courtesy of Tim Foster on Unsplash