HEXO Corp (TSX:HEXO) (NYSE:HEXO) has closed its most recent stock sale raising a cool $57.5 million CAD in capital. HEXO stock has been soaring since; currently selling for $7.14 on the Toronto Stock Exchange and up 2.8% on the day.
The marijuana producer announced Wednesday that it has raised $57.5 million CAD ($43.3 million USD) through a stock sale. Lead underwriters for the deal were CIBC Capital Markets and BMO Capital Markets.
The news appears to be adding to the hype brewing over HEXO stock. The company gained over 30% in the last three months, but a whopping 65% in January alone. This figure makes it one of the best performers in the marijuana industry to start in 2019.
A clear investor favorite, only last week, HEXO uplisted to the NYSE American exchange. Its debut didn’t quite deliver what bulls had hoped; it lost about a percentage on the day. But one of the main reasons for this is that most of HEXO stock’s gains due to uplisting actually happened earlier in the month.
It’s very plausible that investors didn’t have much left in the tank for the actual listing day as the anticipation preceding it shot share prices through the roof.
Penny Stock Masquerade
Bulls shouldn’t worry over HEXO stock, though; in fact, with some of the best fundamentals in the industry, these shares are currently considered undervalued by many. The reason?
HEXO Corp has all the makings of a marijuana giant but with a penny stock price tag:
- The company inked a deal with Molson Coors Brewing Co. (NYSE:TAP) late last year creating one of the most hotly anticipated joint ventures for developing non-alcoholic cannabis-infused drinks in Canada.
- It also has a long and very lucrative supply agreement with the Canadian province of Quebec.
According to Profit Confidential, deals like these for HEXO’s current selling price “are very strong indicators that Hexo is a top marijuana stock masquerading as a penny stock.”
What do you think? Is HEXO stock undervalued? Are we looking at a “masquerading” penny stock?
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