TGOD stock is down 16% this week after Aurora Cannabis Inc (TSX:ACB) (NYSE:ACB) sold its remaining shares in The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF).
On Tuesday, Aurora announced that it had sold its remaining 28,833,334 shares in The Green Organic Dutchman to a syndicate of investors, which reportedly included the Bank of Montreal (NYSE:BMO) and The Canadian Imperial Bank of Commerce (TSX:CM). The sale of TGOD stock, at a price of $3.00 CAD a share, generated $86.5 million USD for Aurora Cannabis; however, both companies’ shares were in the red following the sale, with Aurora hitting its lowest point this year.
The Globe and Mail reported this morning that the syndicate led by BMO Nesbitt Burns, an investment firm within BMO, is struggling to offload the newly attained TGOD stock. BMO structured the deal as a block trade so that it could seamlessly move securities in a painless transaction. According to the Globe, however, there is a lack of interest from institutional buyers in purchasing Aurora’s former shares, leaving the group of investors out to dry with TGOD stock.
Following the deal, Aurora stock has recovered slightly from its year low, making up 12% to $8.16 today. TGOD stock, on the other hand, is struggling to find its feet again, having lost one of its major investors with a wealth of cannabis experience, and speculators are clearly apprehensive about getting involved with The Green Organic Dutchman given BMO’s difficulty in offloading the shares. TGOD stock is likely to benefit from new institutional investors as it gets set to uplist to the NASDAQ exchange, should those investors be found.
Despite TGOD stock struggling this week, losing Aurora as an investor has the potential to benefit the company in the long term. As part of the Investor Rights Agreement, TGOD had to share a certain amount of its cannabis assets with Aurora. Now that Aurora Cannabis is no longer an investor, the added cannabis product could help improve the Dutchman’s revenue and gross margin, but it appears for now that the future of TGOD stock depends on finding the right investor to take Aurora’s position.
Featured Image: Canva