Aurora stock continues to move higher following a 4.50% climb in yesterday's session after Aurora Cannabis (TSX:ACB) (NYSE:ACB) opened its new flagship retail operation, named The Aurora Cannabis Store.
The cannabis sector has been in a slump for the past months, and some of the biggest cannabis companies have seen their stock prices plunge to new lows. In that regard, Aurora Cannabis is as big as they come, and despite its recent troubles, the company is focused on expanding its business.
On Wednesday, the company inaugurated its new flagship store named The Aurora Cannabis Store. More importantly, the store has been established in one of the biggest shopping malls in all of North America, West Edmonton Mall. The news was received well by the market, and Aurora stock climbed by as much as 4.70% on Wednesday.
Its grand opening in West Edmonton Mall is important for two reasons: 1. Edmonton is the hometown of Aurora Cannabis; and 2. This makes Aurora the first cannabis retailer to open a location in a mall of this size. The flagship store will not only sell cannabis but will also have a plethora of other offerings that include clothing, accessories, and also cannabis-related literature. It is an ambitious move from the company and one that could have a massive effect on Aurora’s fortunes.
The rally in Aurora stock must be a welcome respite for investors, considering the fact that it is still down by 5.50% for the week so far.
The setback for the company occurred Monday, when Aurora Cannabis announced that holders of unsecured convertible debentures had sent a notice and asked to convert the debt to equity. The company revealed that these unsecured debentures, which amount to debt of as much as $277 billion, are going to be converted into equity.
The shares are going to be worth $3.2837 per share, and the company will have to issue a total of 69.13 million shares in order to complete the conversion. The issue of fresh shares means that the value of ACB stock held by existing shareholders is going to be diluted, and hence, the drop in Aurora stock price did not come as a surprise.
At the time of writing, Aurora stock is up 1% at $3.39 CAD. Nevertheless, the stock is still down over 20% since mid-November after reporting disappointing Q3 earnings.
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