Aurora stock is fast approaching the $1.00 threshold required to continue trading on the New York Stock Exchange as the coronavirus outbreak causes a market meltdown that hits Aurora Cannabis (TSX:ACB) (NYSE:ACB), among others. Could the embattled cannabis giant be faced with delisting because of this?
Disastrous Timing for Aurora Stock
The spread of the coronavirus around the world and the impact that it has had on global markets couldn't have come at a worse time for Aurora Cannabis. Last month, the pot producer announced that it was laying off up to 500 staff as part of an effort to control escalating expenses, which led to around C$1 billion in impairment charges in the most recent quarter. Since announcing those layoffs just over a month ago, Aurora stock has fallen nearly 50% to currently trade at just $1.05 on the NYSE.
Delisting has been a worry for several cannabis companies that buckled under the pressure of an underperforming market. For example, CannTrust Holdings (TSX:TRST) (NYSE:CTST) has been handed several non-compliance warnings since the illicit cultivation scandal that rocked the industry last summer. With the coronavirus outbreak ushering in a new bear market, exactly 11 years from the beginning of the last bull market, some analysts are wondering if this could be a catalyst for Aurora stock to go the same way as CannTrust stock.
Oil Prices and Canadian Dollar Tumble
To make matters worse for Aurora Cannabis, the Canadian dollar tumbled to a near three-year low against its US counterpart on Monday after the price of oil, one of Canada’s major exports, plunged by more than 20%. This makes the value of Aurora shares move closer to one US dollar, and should it stay there for more than a month, the NYSE will have no choice but to put out a delisting order.
In this event, Aurora could choose to do a reverse split and merge two or more stocks into one. However, this would be an admission that the company does not see its revenues or sales improving, spelling more danger for the firm even without the added uncertainty of the coronavirus. Aurora stock is down over 10% today ahead of what could be a very difficult week.
Featured Image: Canva