Organigram stock rebounds slightly on Thursday after falling 9% in yesterday's trade as Organigram Holdings (TSX:OGI) (NASDAQ:OGI) announced a $55 million at-the-market offering.
The difficulties being faced by the cannabis industry are well-known, and the stock prices of the majority of the companies in the sector are a fair reflection of the situation. Companies are looking for new ways to raise capital, and in a new development, Organigram Holdings has announced an at-the-market offering. It should be noted that Cresco Labs Inc (CSE:CL) (OTCQX:CRLBF) also announced such an offering earlier this week.
According to the terms of this particular offering, it is going to be worth $55 million CAD. Additionally, Organigram Holdings is going to issue common stock from the company’s treasury into the public markets in order to raise the additional funds necessary.
The Bank of Montreal is going to take care of the entire process for Organigram, and the offering is going to be made on both the Toronto Stock Exchange as well as on the NASDAQ. The deadline for the financing is December 21, but if the company manages to raise the amount before that, then it will be closed.
Organigram stock is up 1.50% at $2.60 on the NASDAQ.
Back on November 25, the company released its financial results for its fiscal fourth quarter for the period ending August 31. Organigram suffered a quarterly loss of $22.5 million CAD, which was worse than analysts’ expectations and was also a far cry from the $18.2 million CAD of profit it had made in the prior-year period.
On the other hand, revenue stood at $16.3 million CAD, which was quite a long way off from analysts’ estimates of $19.7 million CAD. However, the poor performance in the fiscal fourth quarter has not dampened the enthusiasm about the company’s stock. Organigram stock jumped by as much as 7% on the TSX when the results were announced.
The reasons cited by the company for the poor show are not terminal in nature. Organigram Holdings stated that the slow rollout of stores and cannabis oversupply had led to poor performance. Both problems are expected to go away in the long-term.
Organigram stock has lost almost 70% from its peak price of $8.44 in May.
Featured image: Canva