Hexo (NASDAQ:HEXO) stock is trending on social media after the company announced that it would carry out a “consolidation” of its shares that are listed in New York and of its stock that trades in Canada. The announcement, made on Dec. 14, came the day before the Canada-based cannabis seller announced its quarterly financial results.
The consolidation is being reflected in the shares for the first time today.
HEXO Stock and the Consolidation
Under the consolidation, Hexo will exchange one share of its stock for every 14 of its shares outstanding. After the change, the number of Hexo’s shares will be reduced by 93%. As a result, the value of each share has increased tremendously.
Indeed, in pre-market trading on the Nasdaq, HEXO stock is changing hands for $1.67, versus Friday’s closing price of 11.9 cents. However, of course, the stock’s owners only have one share of the stock for every 14 shares that they possessed on Friday.
In March, the owners of HEXO stock agreed to allow the company to substitute one share of the stock for every two to 14 shares outstanding.
Hexo ultimately chose to exchange one share of its stock for every 14 of its shares outstanding.
Hexo’s Quarterly Results
On Dec. 15, Hexo announced the financial results for its fiscal first quarter which ended on Oct. 31.
During the quarter, Hexo’s revenue sank 29% year-over-year to 35.77 million CAD. On a positive note, its EBITDA loss, excluding certain items, came in at 600,000 CAD, versus its adjusted EBITDA loss of 17.9 million CAD during the same period a year earlier.
Hexo noted that, in Q1, it had slashed its total operating expenses by 81% year-over-year or 100 million CAD.
“Our laser focus on tackling the balance sheet, pulling back on those unprofitable products where our strengths in premium cultivation were not being leveraged and expanding further into opportunities where we know we can win, is paying off across the business,” said Hexo CEO Charlie Bowman in a statement.
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On the date of publication, Larry Ramer did not hold (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.
