Aurora stock is down 3.95% this morning after Aurora Cannabis (TSX:ACB) (NYSE:ACB) announced it has increased its credit facility.
Difficult Week for Aurora Stock
Aurora will see its current credit facility rise from $200 million CAD to $360 million CAD after it secured commitments syndicate of lenders led by the Bank of Montreal (NYSE:BMO). The announcement did little to help Aurora stock, though, which has had a difficult week after being handed a neutral rating by investment bank Piper Jaffray.
Glen Ibbott, Aurora CFO, said that today's announcement is further recognition that the company's "best-in-class production facilities lead the industry." However, this confidence was not reiterated by speculators of Aurora stock, as share value shed almost 13% since the beginning of this week's trading.
Executives were clearly hoping that today's announcement would help Aurora stock close the week on a high, but the company appears to be struggling to shake off news of Piper Jaffray's neutral rating, especially considering that of the five other cannabis companies analyzed by the investment bank, Aurora stock was the only one not to be given a "buy" rating.
>> Aleafia Stock May Be Trading in the Red but Q2 Report is Still Impressive
Is it All Bad News for Aurora Stock?
While Aurora stock may not have had the strongest week, it's probably not all doom and gloom for the company. With a $6.7 million CAD market cap and some of the best production facilities in the Canadian market, Aurora is well-positioned to make gains should the market recover from its summer slump.
Piper Jaffray's neutral rating also has to be taken with a pinch of salt. Michael Lavery, the Piper Jaffray analyst responsible for the rating, based his analysis off Aurora stock's rich valuation combined with the fact that the company has not invested much outside of Canada and does not have a US business plan. Perhaps today's news of an expanded credit line could be an early signal that the company intends to increase its international footprint.
Featured image: Canva
