Struggling cannabis company Tilray Brands (TLRY) is planning to undertake a reverse stock split.
Tilray’s stock currently trades at $0.45 per share on the Nasdaq Composite exchange and the company is in danger of having its shares delisted if it can’t get the price back up to $1. Reverse stock splits artificially inflate a share price. In Tilray’s case, the split could help to get the struggling stock back up above $1.
Tilray CEO Irwin Simon says the company will ask its shareholders to approve a plan that would allow a reverse stock split of its common shares at a ratio ranging from 1-to-10 or even 1-to-20. The exact ratio will be determined by Tilray’s board of directors should the plan be approved by shareholders in a vote scheduled for June 10.
Stunning Collapse
Tilray’s financials and share price have struggled since the company went public in 2018. Originally based in Canada, expectations were high for Tilray’s legal cannabis dispensary business. But the company struggled to compete against the black market for cannabis in Canada, and the hoped for national legalization of the recreational drug in the U.S. never materialized.
As a result, Tilray’s sales and its stock have plummeted. After peaking near $150 a share in 2018, TLRY stock has fallen all the way down to $0.45 per share today. The company has relocated its headquarters to New York City and diversified into selling alcohol as well as cannabis. But nothing has managed to stop the company’s slide lower. TLRY stock has fallen 99% since going public in 2018.
Is TLRY Stock a Buy?
The stock of Tilray Brands has a consensus Moderate Buy rating among six Wall Street analysts. That rating is based on two Buy and four Hold recommendations issued in the last three months. The average TLRY price target of $0.93 implies 107% upside from current levels.
