Tilray (NASDAQ:TLRY) stock is falling hard on Friday after the company announced details of a $150 million registered direct offering.
The $150 million registered direct offering covers 5.20% convertible senior notes due 2027. Underwriters of the offering also have a 30-day option to acquire another $22.5 million aggregate principal amount of notes.
Tilray notes that the registered direct offering will give it additional cash proceeds of $15 million or $37 million if the underwriters exercise their options. It will also bring its cash, cash equivalents, and marketable securities on hand to about $440 million.
Tilray also says it will use funds from the offering to pay down current debts. That includes its 5.00% convertible senior notes due 2023 and 5.25% convertible senior notes due 2024. It will also use the money for general corporate purposes.
What This Means for TLRY
Management at Tilray sees the registered direct offering as a positive. Irwin Simon, chairman and CEO of the company, said as much in a press release:
“We successfully executed a favorable refinancing which demonstrates the strength of our Company and investor confidence in our management team and strategic plan.”
However, today’s news is sending shares of TLRY stock 22.9% lower as of Friday morning. With that comes some 4 million shares changing hands with the company’s daily average sitting at about 10.7 million shares.
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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.