The case against Aurora Cannabis
- Aurora failed to disclose that its revenue would drop in the first quarter of fiscal 2020, which ended on September 30, 2019.
- The company failed to disclose plans to stop the construction of its Aurora Sun and Aurora Nordic 2 facilities.
- Due to this, the company’s statements about its receivables, operations, business, and future growth plans were materially incorrect and misleading.
The lawsuits represent investors that purchased the company’s securities from September 11, 2019, to November 14, 2019. The firms are attempting to gain compensation for investors under the Securities Exchange Act of 1934 to cover the damages they’ve suffered. The firms are also encouraging other investors to contact them to participate in the litigation.
Aurora Cannabis recently announced its fiscal 2020 first-quarter results. The company reported 75.3 million Canadian dollars in revenue, a sequential decline of 24% from 98.9 million Canadian dollars in the fourth quarter of fiscal 2019. This result also included a 33% decline in the revenue of consumer cannabis products. The company also reported a greater EBITDA loss of 39.7 million Canadian dollars in the first quarter.
Aurora also announced its decision to delay its previously stated growth initiatives to cut expansion costs. Its construction at Denmark’s Aurora Nordic 2 and Canada’s Aurora Sun facilities have stopped for the foreseeable future, implying a decrease of 190 million Canadian dollars in capex. Aurora also announced that it was opening an early conversion privilege for convertible debenture holders. Holders currently have 230 million Canadian dollars’ worth of convertible debentures.
Aurora Cannabis stock
Though other cannabis stocks are tumbling this year, November has been rough for Aurora in particular. The stock has lost almost 25% of its value month-to-date. This drop is mainly the result of the quarterly results it reported in the second week of the month. From the time of its earnings release, the company’s stock has fallen 18%. Its peer Canopy Growth (CGC) (WEED) is also facing an investigation related to possible misleading statements.