On Thursday, May 2, TRST stock plunged into the double-digits. Why? The plunge began in premarket trade after CannTrust Holdings (TSX:TRST) (NYSE:CTST) revealed the pricing of its previously announced common stock offering.
Here's what we know.
TRST Stock Takes a Cold Plunge
Last month, CannTrust Holdings announced its public offering of common shares. Today, the Canada-based cannabis company announced the pricing of this offering, and because the pricing is at a deep discount, TRST stock has taken a significant hit.
According to Yahoo Finance, as of 11:00 AM EDT, TRST stock is trading at $7.78, putting it down 10.27%. Meanwhile, CTST stock is trading at $5.76 on the NYSE, which puts it down 10.56%.
The 36,363,636 million share offering has a price of $5.50 per share, according to the CannTrust Holdings press release. The cannabis company will sell 30,909,091 shares for gross proceeds of $170 million, and the balance will be sold by selling shareholders.
What's Next for CannTrust Holdings?
Now that the market knows the pricing of the CannTrust public offering, we have to wait to see if the offering closes or not. Subject to the satisfaction of customary closing conditions, the TRST public offering is forecasted to close around May 6, 2019.
If the offering does close, CannTrust plans to use the net proceeds for international, cultivation, and facility expansion. The cannabis company also plans to use it for biosynthesis development. And while that all sounds good, TRST stock isn't reacting in a way that indicates the market truly believes this offering is a good thing. Or maybe it's just the pricing the market is upset with.
But who knows, things could change tomorrow. All we know is that CannTrust stock tumbled toward a four-month low in premarket trade Thursday, and the pricing of the offering is nearly 15% below yesterday's closing price.
So are we surprised to see TRST stock plunging in double-digits? You tell me! What do you think tomorrow's trading session holds for TRST stock? Let us know in the comments below!
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