Aurora Stock Fails to Sustain at Higher Level: Should You Be Nervous?

Aurora stock

2019 has been a tough year for the cannabis industry, but it has been particularly tough for Aurora stock, which is one of the biggest players in the sector. While it is true that many companies have seen their stock prices plummet, Aurora Cannabis (TSX:ACB) (NYSE:ACB) has fallen quite dramatically, and since March, it has lost as much as 80% of its value. Moreover, the company’s spending has been a bit over the top, and the debt has landed Aurora in a bit of trouble.

Higher Debts

Although Aurora paid off $230 million CAD worth of convertible debt recently, there is a long way to go for the company to manage its debt effectively. On top of that, the company recently announced at the time of its earnings that it has decided to hit the pause button on the development of two facilities. The company’s expansion into Europe hit a snag as well after authorities in Germany banned its medical cannabis, pending a review. Considering the sheer size of the German market, it is a large blow for Aurora.

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Aurora stock is down 2.31% at $3.38 CAD.

As everyone knows, one way Aurora Cannabis could raise cash is by striking up partnerships and perhaps selling a stake in the company to a partner. However, the company has performed quite poorly on that front. In addition to that, the fact that its rivals, such as Cronos Group (TSX:CRON) (NASDAQ:CRON) and Canopy Growth (TSX:WEED) (NYSE:CGC), are already partnered with big names makes matters worse for Aurora.

The financial problems being faced by the company have also made it an unattractive partner for many, and Aurora is stuck in an impasse of sorts. Some analysts believe that Aurora stock could prove to be a decent speculative bet, considering the fact that there is no imminent danger of the company going bankrupt.

What do you think?

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