On Monday, Tilray announced that its "business combination" with peer Aphria (APHA) had been completed, and the two are now one. Reddit group WallStreetBets also pumped up some marijuana stocks. Stephanie Bedard-Chateauneuf for But the pro forma revenue of $693 million cited in December includes two revenue streams that might not be as valuable. They might be waiting for some kind of pop in the stock. Even with a sharp pullback of late, APHA has nearly quadrupled from where it sat in early March of last year. Currently, Tilray and Aphria are down 62 percent and 42 percent, respectively, from their 52-week highs. Cardina: Can you tell us what investors need to know? Key details about the Aphria-Tilray merger. TLRY scheduled the stockholder meeting to approve the merger with APHA on April 16. The merger between Aphria and Tilray makes perfect sense. Visit a quote page and your recently viewed tickers will be displayed here. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. Copyright 2023 MarketWatch, Inc. All rights reserved. Simply click here to get the full story now. Aphria stockholders will get 0.8381 Tilray shares for each APHA share that they hold. The delayed merger vote and the new quorum requirements have raised concerns. The merger will also generally offer the new company access to capital and improved funding. There will be a chance to buy TLRY cheaper down the road. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. It would also see the new company instantly offer real competition to established players like Canopy Growth and Aurora Cannabis both in North America and globally. The required two-thirds majority of Aphria shareholders backed a motion to approve the deal at the company's shareholders meeting on Wednesday. Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. Were a community for all things stoner from entertainment to guides and smoking accessories, we honor the green goddess. 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. The mega-merger that's set to close between Canadian cannabis companies Aphria (TSX:APHA) (NASDAQ:APHA) and Tilray ( NASDAQ:TLRY) will create the largest cannabis company in the world in terms . Please consult a licensed medical provider before using a vaporizer. APHA . The latest among these states is New Mexico. After Tilrays (TLRY) shareholders voted in favor of the proposed merger Aphria (APHA) last Friday, the two cannabis companies announced today the completion of the transaction. At the same time, Im not sure its the best deal for Aphria, even if current APHA shareholders will own 62% of the combined company. Essentially Aphria is acquiring Tilray because after the smoke clears and all the shares are exchanged, it's an all-stock transaction. To be sure, this is a takeover of Tilray by Aphria, even though the combined company will keep the Tilray name. Corinne Cardina: Let's talk about a big splashy deal. The combination of Aphria and Tilray is expected to generate roughly $81 million in annual pre-tax cost savings within 18 months of the transaction's completion. Aphria(APHA)andTilray(TLRY)first announcedtheir proposeddealin December of last year. Interestingly, Sweetwater also produces hemp-infused beverages. 1125 N. Charles St, Baltimore, MD 21201. Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. Shares of both Tilray and Aphria are up today $TLRY $APHA. Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. Aphria has agreed to acquire U.S. craft beer company Sweetwater Brewing, which makes cannabis-infused beverages, and Tilray is a partner of Anheuser-Busch InBev. Aphrias CEO Irwin D. Simon will lead the company. Tilray Inc. TLRY, -4.35% shareholders voted to approve the Canadian cannabis company's proposed merger with Aphria Inc. apha ca:apha at a special meeting on Friday, according to media reports . Marijuana stocks have been very volatile over the last few months. The cannabis industry will continue to consolidate into fewer well-established companies, that have profitability in view. The case for APHA stock has taken a big hit in recent months. Related News:good natured Products Revenue Increases 65% In FY2020The Green Organic Dutchman Gives Update On OperationsAphria Shareholders Approve Tilray Merger. 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. The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders, the companies said. However, the arbitrage opportunity has since come down greatly. Probably tells you something about Aphria too. Learn More. Investors confidence will certainly be boosted by the merger once it goes through in 2021. Thats true, technically. Aphria (@aphriainc) said 99.38% of its shareholders voted to approve its merger with Tilray (@tilray). You must be 21 years or older to view and purchase products featured on this site. Eventually, on the merger date, APHA stocks would get converted to TLRY stocks based on the merger ratio. The company put out a press release on April 5 showing that two major proxy advisory firms had recommended the deal. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Stoners Rotation is an ecommerce for smoking devices and accessories. This is why Aphria's merger with Tilray is so critical. A deviation in stock prices can lead to merger arbitrage. All told, nothing here really stands out. Please verify your age to enter. 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). 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. You must be 21 years of age or older to view the page. After Tilray's ( TLRY) shareholders voted in favor of the proposed merger Aphria ( APHA) last Friday, the two cannabis companies announced today the completion of the transaction. Your access is restricted because of your age. Tilray Has 64% Upside After "Perfect Match" Merger, Analyst Says, 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. Growth looks tepid. Is the merger a done deal? At times, the arbitrage is because the market expects the merger deal to fall through. At the same time, as more U.S. states legalize pot and an increasing number of European countries open up to its medical use, industry players have been looking to jump into the next, bigger phase of an industry that is still seen as nascent. The company says that the "new Tilray" will have synergies of over 100. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Uber reversed its decision and reactivated the driver after being contacted by MarketWatch. Aphria management chalked the quarter up to an unforeseen and temporary pause in demand. Incidentally, there was a massive merger arbitrage in the TLRY and APHA merger. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Apr 17, 2021 04:58AM EDT. 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. In December 2020, Tilray (TLRY) and Aphria (APHA) announced a merger that would create the worlds largest marijuana company. Stephanie Bedard-Chateauneuf for Over the past 12 months, Aphria lost $163 million. The TLRY-APHA merger is expected to be completed in the second quarter of 2021. After all that, Aphria is going to own something like 62, 63. The company will continue to trade on the Nasdaq Global Select Exchange under the symbol "TLRY" and will commence trading on the Toronto Stock Exchange under the symbol "TLRY" on May 5. 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. Based on April 16 closing prices, APHA trades at 0.822x of what TLRY trades at, which is similar to the merger ratio. The cost savings will also lead to considerable improvements to the bottom line for the new company. Each Aphria share will become 0.8381 shares of Tilray stock, on top of that companys existing share base. But in April 2021, Im far less optimistic. Action Alerts PLUS is a registered trademark of TheStreet, Inc. Take Charge of Your Money During our April Sale! Market Realist is a registered trademark. Type a symbol or company name. Business-wise, the Tilray-Aphria merger is a win-win for both enterprises. Marijuana stocks surge as NY Governor says state legalization is close. Meanwhile, Tilray had $271 million loss. Invest better with The Motley Fool. I think that's a good move because I think Tilray has a slightly stronger brand name and recognition. Why is it delayed and has it been confirmed? Aphrias pending merger with Tilray (NASDAQ:TLRY) admittedly makes some sense. ET. In a deal that's widely considered as a "reverse merger", Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. According to executives from both Aphria and Tilray, the merger is targeted at cost savings and creating synergy. Personally, Id rather see Aphria go it alone or look to the unnamed company that too approached Aphria about a merger last year. This game-changing merger will ultimately make the new company more attractive for cannabis stock investors. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guidewhich you can reviewhere. Aphria shareholders will receive 0.8381 shares of TLRY stock for every one share of APHA stock they own. Tilray surges 27% after $4 billion merger with Aphria creates the world's biggest cannabis company. People may receive compensation for some links to products and services on this website. On Monday, Tilray. To mark the new phase of its existence, Tilray has also changed its corporate logo. They have lots of growing assets, they are active in every consumable product category including the so-called Cannabis 2.0 products in Canada which are derivatives like extracts, there's also beverages, marijuana-infused beverages. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. Part of the cause of the sell-off is that APHA got some draft from the Reddit rallies, even if it didnt move as high as did Tilray. 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 . Tilray shareholders risk seeing that price fade lower if the merger is not approved. Corinne Cardina has no position in any of the stocks mentioned. Markets welcomed the news as a sign of consolidation in the. has gained 47% and the S&P 500 No wonder both the stocks rallied after the merger was announced. Article printed from InvestorPlace Media, https://investorplace.com/2021/04/tlry-stock-will-likely-fall-once-the-aphria-merger-is-approved-on-april-30/. In the middle of February, APHA stock was trading at around 0.41x what TLRY was trading at. Again, relatively speaking, you're not talking Philip Morris (PM 0.46%) or Exxon (XOM -1.16%) here, these are relatively small companies. The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). That business has gross margins of just 13% and not all of the revenue comes from cannabis. Cost basis and return based on previous market day close. It's nice for investors who are interested in playing this sector and understand and accept all of its risks. There's a lot of production now that's out there, it's hard to make money on them simply because there's so much weed being grown. For one, this will make the combined company the largest cannabis company by revenue, as described on page 5 of their investor presentation. For a start, this merger is expected to create a combined equity value of $3.9 billion. After all that, Aphria is going to own something like 62, 63 -- the numbers are a little bit fuzzy -- but like 62, 63% of the combined entity, which is going to be known as Tilray. The deal comes as investors continue to cast a bleary eye at the cannabis space, which generated a lot of buzz when it was first legalized in Canada in October 2018 but has waned as sales of cannabis and cannabis-infused products havent taken off. In a research note, Bottomley told investorsthat while he believesthe companys3Q "signals a number of red flags" that could impact most cannabis operators, he is downgrading Aphriaas the stockis trading at 97% of the impliedtransactionprice with Tilray. Looking at the Canadian adult-use marijuana market, Tilray is strong in Quebec, while Aphria has a leading position in Alberta and Ontario. has gained 9%. What's happening with the TLRY and APHA merger? They're going by trailing 12-month revenue and I don't know if going forward that's sustainable. 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