Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray ( TLRY). Written by They come in the context of whats looked like negative news flow over the past five months. Nasdaq Read on to find out. These symbols will be available throughout the site during your session. For a moment, there was a merger-related case for APHA stock regardless. 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. What's happening with the TLRY and APHA merger? 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). The deal is expected to close in the second quarter. Again, the stock still is up 90% so far this year. For one, this will make. In a deal thats widely considered as a reverse merger, Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. Eric Volkman has no position in any of the stocks mentioned. Corinne Cardina: Let's talk about a big splashy deal. Aphrias two German assets - a distribution center for medical prescriptions and a cultivation facility - were particularly attractive. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. The merger between TLRY and APHA is a reverse merger where Tilray, which is the smaller company between the two, would acquire APHA. Copyright 2023 Market Realist. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Whats the TLRY-APHA merger date? But TLRY stock will likely fall once the merger goes through since it may take time for synergies to work. As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.". Why Aphria, OrganiGram Holdings, and Aurora Cannabis Rose Today, 3 Warning Signs From Aphria's Abysmal Earnings Report, Forget Aphria and Tilray: This Cannabis Merger Is Much More Promising, 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. According to the merger ratio, APHA stock should trade at 0.8381x of TLRYs stock price. Volkman: Yeah. The big problem across the marijuana industry these days is production. Your access is restricted because of your age. Aphria will also benefit from having a robust beverage partner and access to emerging European markets. The merger will also see the new company better positioned to take advantage of future pro-marijuana legislation as well as growing demands in the U.S. and Europe. Learn More. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. The case for APHA stock has taken a big hit in recent months. Simon said, "Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level. (See Tilray stock analysis on TipRanks). . 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. However, the arbitrage opportunity has since come down greatly. Are Canadian Pot Stocks Headed for Another Crash? +0.33% 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. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. Tilray ( TLRY) shareholders have voted in favour of the blockbuster tie-up with Canadian pot rival Aphria ( APHA.TO ) ( APHA ), paving the way for the formation of a new global cannabis. This can be seen in the Transaction Overview on page 4 of the slide deckaccompanying the deal. Key details about the Aphria-Tilray merger. That move was also expected to make it easier for the deal to be approved. On December 16th, Aphria (TSX: APHA) (NASDAQ: APHA) and Tilray (NASDAQ: TLRY) announced a pending stock-based merger. Results for the fiscal third quarter (ending Feb. 28) were not promising on that front. Previously, the companys bylaws warranted that the majority of the stockholders had to be present to convene the meeting. On Friday after the markets closed, Tilray filed a joint preliminary. All Rights Reserved. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. A driver spent $180,000 to start an Uber Black business. have merged after months of negotiations, creating a company with a combined market cap of $3.3 billion. First, Aphria has a distribution business in Germany that accounted for more than half of revenue in the third quarter. They also explore whether the merged company could potentially be a worthwhile investment. Now, all eyes will be on the TLRY stockholder meeting later this month when the company takes up the merger vote. People may receive compensation for some links to products and services on this website. As I had noted previously, the massive arbitrage wasn't sustainable. These businesses have to start growing at some point. Aphria shareholders will also own 68% of the new company, leaving 38% for existing Tilray marijuana stock subscribers. For Tilray, it will provide a much-needed boost to their balance sheet after a rocky year. There will also be significant. Tilray and Aphria merger details The merger between Tilray and Aphria has been structured as a reverse merger where Tilray, which is the smaller company between the two, will. Aphria (APHA) and Tilray (NASDAQ:TLRY) are merging.Combined, the two companies are likely to save money - the main focus of the press releases - but it will take some time until those savings . Aphrias pending merger with Tilray (NASDAQ:TLRY) admittedly makes some sense. I should mention, they're also quite active in international markets. Ive long been a skeptic toward Tilray, whose growth and revenue base hardly stand out among Canadian players. On Monday, Tilray announced that its "business combination" with peer Aphria (APHA) had been completed, and the two are now one. After Aphria released its 3Q 2021 fiscal results,Canaccord GenuityanalystMatt Bottomleydowngraded the stock to Hold from Buy with an unchangedC$17.50price target (1.07% downside potential). Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. Aphria and Tilray Join Forces in Cannabis-Infused Mega Merger. Locked in or trapped? You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. Unfortunately, at this point in the growth of Canadian cannabis, its pretty much impossible to take managements word for it (even though I do respect Aphria head Irwin Simon). Market Realist is a registered trademark. 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. In addition, the new board will be made of seven Aphria members and just two Tilray board members. The latest among these states is New Mexico. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. Simply click here to get the full story now. Marijuana stocks surge as NY Governor says state legalization is close. has gained 47% and the S&P 500 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. Finally, consolidation is a welcome step in the marijuana industry. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. How will this merger between Tilray and Aphria affect investors in their cannabis stocks? But again relatively speaking, they're going to be a big player in marijuana, they're going to be hard to ignore, they're going to be the largest Canadian marijuana company by far. She is based in New York. These 3 industries could be completely disrupted by data analytics. Article printed from InvestorPlace Media, https://investorplace.com/2021/04/tlry-stock-will-likely-fall-once-the-aphria-merger-is-approved-on-april-30/. Is the merger a done deal? In December 2020, Tilray (TLRY) and Aphria (APHA) announced a merger that would create the worlds largest marijuana company. Shares of both Tilray and Aphria are up today $TLRY $APHA. ca:apha If you've been keeping up with the marijuana industry, you'll notice a trend could be emerging. However, since then, both TLRY and APHA have fallen sharply amid the sell-off in marijuana stocks. People may receive compensation for some links to products and services on this website. Create your Watchlist to save your favorite quotes on Nasdaq.com. The company says that the "new Tilray" will have synergies of over 100. Overhead. THCX, Reportedly, Tilray hasnt been able to gather the required number of votes to get the merger approved. However, there has been a sell-off since then. Were a community for all things stoner from entertainment to guides and smoking accessories, we honor the green goddess. Current share. 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 Cannabis ETF Again, relatively speaking, you're not talking Philip Morris (PM 0.46%) or Exxon (XOM -1.16%) here, these are relatively small companies. 13 min read. On Monday, Tilray's shares closed 7.2% lower, against the 0.3% rise of the S&P 500 index. Its gained a whopping 90% so far in 2021. To mark the new phase of its existence, Tilray has also changed its corporate logo. For Aphria and Tilray, the deal positions the companies to take advantage of potential U.S. federal legalization as well as the prospect of more legalization in Europe. When it does exist, it could become the world's biggest cannabis company eclipsing Canopy Growth by market cap.. Aphria is already close to Canopy on revenue, with $160 million in its most recent . (See Aphriastock analysis on TipRanks). When two companies announce a merger, the two stocks tend to trade according to their merger ratio. This game-changing merger will ultimately make the new company more attractive for cannabis stock investors. According to executives from both Aphria and Tilray, the merger is targeted at cost savings and creating synergy. 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. Aphria's CEO Irwin Simon is taking over that role with the reconstituted Tilray, and has also become the chairman of the new company's board of directors. Also, there are financial synergies involved. Moreover, some might want to see if the proposed synergies actually do pan out, which could take some time. Tilray will hold a meeting of shareholders to vote on the reverse takeover by Aphria onApril 30. However, given the fragmented nature of the marijuana industry, I dont see any real regulatory hurdle for the merger. The merger between Aphria and Tilray makes perfect sense. Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. In an all-stock deal agreed to last December, each Aphria share held as of April 30 was swapped for 0.8381 of a Tilray share. Under the terms of the agreement, Aphria will become a wholly-owned subsidiary of Tilray. Investors found the prospect of a Tilray-Aphria merger exciting. TLRY stock was at $7.87 on Dec. 15, the day before the merger announcement. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. OrganiGram Holdings 2Q Revenue Misses Estimates; Shares Plunge 10%, Aphrias 3Q Sales and EPS Miss Estimates; Shares Plunge 14%, Shaw Communications 2Q EPS and Revenue Beat Estimates, Do Not Sell My Personal Information (CA Residents Only). Written by Check your inbox or spam folder to confirm your subscription. +2.93% The Motley Fool has a disclosure policy. Yet Aphria is the business that needs to do more of the heavy lifting post-merger. That in turn suggests that each Aphria. Tilray Marijuana stocks rallied as high as 27% when it announced its agreement to enter into a merger with Aphria just before Christmas. The first quarter of 2021 has come to an end and it was certainly one to remember for the top cannabis stocks in the market. 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). TIlray, however, is postponing its shareholder vote to April 30 (should have been tomorrow). Tilray Inc. Tilray lost 271 million CAD for the year ending Dec. 2020 and Aphria has lost 361 million CAD in the nine month period ending Feb. 28. 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 marijuana volumes that are currently outsourced by Tilray would be supplied by Aphria, which would lead to higher revenues for the merged entity. Anytime a company, or companies, are in a position to cut down on that, to combine assets, to rationalize like that, that's a positive development. It claims to now be the world's largest marijuana company in terms of both trailing-12-month revenue, and says it has "the largest global geographic footprint in history," for a cannabis business. Relative to FY2021 (ending March) consensus estimates, Canopy Growth (NASDAQ:CGC) trades at about 20x EV/revenue, and Sundial Growers (NASDAQ:SNDL) an even higher multiple. Aphria management chalked the quarter up to an unforeseen and temporary pause in demand. What does this mean for the marijuana industry at large? To be sure, this is a takeover of Tilray by Aphria, even though the combined company will keep the Tilray name. Learn More. Merger Details The deal, should it be approved, will go as follows. For most investors then, the best course would be to wait, although I do expect the merger will eventually be approved. TheCombined Company will be increasingly well positioned to deliver a sustainable attractive return for our combined shareholder base." The Motley Fool has no position in any of the stocks mentioned. All products available for purchase through this website are intended for hemp-derived products with less than 0.3% concentration of THC by dry weight, as well as other legal herbs. 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. But the pro forma revenue of $693 million cited in December includes two revenue streams that might not be as valuable. Adjusted EBITDA did rise modestly but thanks to a $4.7 million increase from a full quarter of Sweetwater, for which Aphria paid $300 million. Simonsaid, "I want to thank all Aphria Shareholders for voting and approving the Arrangement. Thanks to the crazy Reddit-driven rallies in February, the spread between TLRY and APHA ballooned. 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). Why Is Bed Bath & Beyond (BBBY) Stock Up 15% Today? Eventually, on the merger date, APHA stocks would get converted to TLRY stocks based on the merger ratio. TLRY was trading at almost twice what it should have based on the merger ratio. But Aurora Cannabis (NYSE:ACB) is cheaper on that basis and, again, not all of Aphrias revenue is created equal. Through Tuesdays close, Tilray shares have fallen 54% in 2020, while Aphrias have risen 56%. Aphria didnt do so in Q3, and that is a red flag. 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