Aurora Cannabis Inc (ACB)

[Edward]

Don't quite get it, since they just raised $345 million in Jan. 2019 (for expansion, still not used) makes me wonder. Looks to me that there is a potential deal under consideration, and the shelf filings secures funding if needed. They may be looking at acquiring as stated in the SEC filing (see below). Still believe Aurora's management would favor an acquisition over a partnership. A partnership would bring an infusion of cash, Aurora has chosen to raise cash with a shelf offering.

"Securities may be offered and issued in consideration for the acquisition of other businesses, assets or securities by the Company or a subsidiary of the Company. The consideration for any such acquisition may consist of any of the Securities separately, a combination of Securities or any combination of, among other things, Securities, cash and assumption of liabilities."

$750 million sounds a lot, but since it may be months down the road (let's be optimistic for the price) , if all stock and issued at a price of $10 that would translate into 75 million shares. Would bring the O/S to appox. 1.1 billion. One billion or 1.1 billion don't think would be a disaster, if an acquisition (or partnership) will result in substantial revenues and profits.As for the short term, may be a decline in the stock price.

If half of the $750 is in debt, i would consider that more troublesome since currently they have about $19 million a year interest payments. With an additional $350 debt that would bring the annual interest payments to $38-40 million a year.And if convertible bonds will create dilution also. Earnings are reported on a diluted and fully diluted basis.