Aphria has responded, but the fallout continues
Stock in leading Canadian cannabis producer Aphria was taking a nosedive Monday, as the company denied allegations by a short seller who said it had spent more than $200 million to acquire overseas companies of little value that were previously owned by Aphria insiders.
In a presentation at a short-selling conference Monday morning in New York, hedge fund manager Gabriel Grego said his visits to the sites of three Aphria acquisitions in Jamaica, Colombia, and Argentina showed abandoned properties or tiny entities that Aphria trumpeted as its entries into those national markets. Grego urged attendees of the KASE Learning Shorting Conference in New York to sell Aphria’s NYSE-listed stock (ticker: APHA).
Valued on the New York exchange at $2 billion, Aphria has been one of darlings of the Canada’s cannabis industry. Like many of its marijuana peers, Aphria has enjoyed a stock market capitalization that’s nearly 100-times its trailing 12-month sales. Aphria stock closed down more than 23% on Monday, to $6.05 per share. Pre-market trading was halted on Tuesday morning as the company said it “unequivocally stands behind” acquisitions criticized by Grego. The stock was down another 19% in mid-morning trading on Tuesday, to $4.91 per share.
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