High Tide (NASDAQ:HITI) stock is taking a beating on Tuesday as investors react to a public stock offering from the cannabis company.
According to a press release from High Tide, it’s entered into an agreement with a collection of underwriters led by Echelon Wealth Partners. This will have those underwriters acquiring 4,310,400 units from the company.
So why is that dropping HITI stock today? First off, investors likely aren’t happy about the price of the deal, which comes in at 2.32 CAD per unit. Secondly, stock offerings typically harm shares as they dilute current shareholders’ stakes in the company.
To go along with this, the agreement signed by High Tide has each unit containing one share of HITI stock and one warrant to purchase an additional share. Those warrants have a lifespan of 60 months and are exercisable for 2.73 CAD each. There’s also an option for underwriters to acquire an additional 646,560 up to 30 days after the deal closes.
High Tide expects to raise up to 11.5 million CAD from the stock offering. The company intends to use these funds for “constructing and opening new retail cannabis store locations, the repayment of debt and for general corporate and working capital purposes.”
This news has HITI stock seeing heavy trading today. That has some 1 million shares moving as of this writing. That’s above its daily average trading volume of about 137,000 shares.
HITI stock is down 22.8% as of Tuesday morning.
Investors looking for more stock market news today are in luck!
We’ve got all the most recent stock news that traders need to know about for Tuesday! A few examples include why shares of Exela Technologies (NASDAQ:XELA), NCR (NYSE:NCR), and Marathon Digital (NASDAQ:MARA) stock are on the move. You can find out all about these matters at the links below!
More Tuesday Stock Market News
- Exela Technologies (XELA) Stock Squeezes 17% Higher
- NCR Stock Pops 13% on Buyout News
- Why Is Marathon Digital (MARA) Stock Up Again Today?
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.