IB Net Payout Yields Model

Aurora Cannabis: $8 Isn't Likely Enough

The market wants to push Aurora Cannabis towards previous highs.
Cowen placed a $10.50 target on the stock while the previous high of $12.50 is on the radar.
The Canadian cannabis market is about to become flooded with legal supply as the illegal supply undercuts prices.
The best projection is that weak prices causes Aurora Cannabis to miss revenue targets this year, ultimately crushing the stock towards year end.
My investment thesis on Aurora Cannabis (ACB) has long held that the cannabis stock might have another rally left based on sector momentum. In the short term, the market cares more about price than fundamentals and a move above $8 has been a signal for another test of previous highs. A big analyst call sealed the likely rally in the stock.

Updated 3/13
The hiring of Nelson Peltz doesn't signify anything, but Nelson getting richer per the huge option grant to him. Regardless, the stock was big buy for this break above $8.

Option Grant
In consideration for the Services to be provided by the Senior Advisor, the Company has granted options (the "Options") to the Senior Advisor to purchase 19,961,754 common shares in the Company at a price CAD$10.34 per share. The Options will vest ratably over a four year period on a quarterly basis, subject to accelerated vesting based on the occurrence of certain specified events, which include the consummation of certain defined transactions, and the closing price of Aurora's common shares being at least CAD$31.02 and additionally CAD$41.36 for a specified number of trading days. The Senior Advisor may exercise any portion of the Option that has vested on or prior to the seventh anniversary of the date of grant. 
Read the full article on Seeking Alpha. 
More commentary - WhoTrades
Disclosure: No position. Please review the disclaimer page for more details. 


Popular posts from this blog

Occidental: Still Producing Too Much Oil

ChargePoint: Low Quality Beat

Aurora Cannabis: Deal Or No Deal