*Average returns of all recommendations since inception. For a moment, there was a merger-related case for APHA stock regardless. The merger would be subject to regulatory approvals. Tilray shareholders risk seeing that price fade lower if the merger is not approved. All rights reserved. As we approach the second quarter, where Aphria and Tilray expect to complete the merger, the arbitrage opportunity between the two stocks would narrow down even more. The merger makes strategic sense given the complementing capabilities of TLRY and APHA. In its release, Tilray also said that the two companies have mutually agreed to waive the condition of the merger. Then the company deactivated his account. Is the merger a done deal? 1125 N. Charles St, Baltimore, MD 21201. And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution. Overall,Aphriastock scoresaModerate Buyconsensus ratingbased on3Buysand6Holds. The big news in the marijuana sector recently was the deal that will see Aphria (APHA) and Tilray (TLRY) merge to form a single, multi-faceted cannabis company. On December 16th, Aphria (TSX: APHA) (NASDAQ: APHA) and Tilray (NASDAQ: TLRY) announced a pending stock-based merger. 7 Sorry Pharma Stocks to Sell in April Before Its Too Late, Louis Navellier and the InvestorPlace Research Staff, 5 Penny Stocks With Explosive 5X Potential, Another Rare Bullish Indicator Flashed Last Week, 7 Stocks to Sell in April Before They Crash and Burn, Mullen Files to Resell Up to 2.1 Billion Shares of MULN Stock. Management might be correct. Offers may be subject to change without notice. Combined, Tilray and Aphria will make $874 million in revenue compared to $842 million by runner-up Curaleaf (OTCMKTS:CURLF). In the all-stock merger, Aphria shareholders will receive 0.8381 shares of TLRY stock for each share of APHA they own. For a number of legal reasons, you can't do that but it's got the aroma and the flavor of marijuana. But Aurora Cannabis (NYSE:ACB) is cheaper on that basis and, again, not all of Aphrias revenue is created equal. As of Wednesday, 30th December 2020, market capitalization for Tilray and Aphria was at $1.31 billion and $2.195 billion respectively. The required two-thirds majority of Aphria shareholders backed a motion to approve the deal at the company's shareholders meeting on Wednesday. Tilray Has 64% Upside After "Perfect Match" Merger, Analyst Says, The IRS Is Urging Millions of Early Filers to Amend Their Tax Return, 1 Warren Buffett Index Fund Could Turn $100 Per Week into $1 Million, 2 Stocks That Could Join Apple, Microsoft, Amazon, and Alphabet in the $1 Trillion Club, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Type a symbol or company name. The year-to-date gains in particular look a bit questionable. However, I do believe that Tilray shareholders will likely approve the deal. Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level. Marijuana stocks experienced a surge in price on Monday after Governor Andrew Cuomo confirmed that his state was very close to lega STONERS ROTATION 2023 | A VESSEL CREATIVE COMPANY. Aphria has agreed to acquire U.S. craft beer company Sweetwater Brewing, which makes cannabis-infused beverages, and Tilray is a partner of Anheuser-Busch InBev. Through Tuesdays close, Tilray shares have fallen 54% in 2020, while Aphrias have risen 56%. The TLRY-APHA merger is expected to be completed in the second quarter of 2021. Its gained a whopping 90% so far in 2021. This merger between these two cannabis firms will see Tilray become the biggest player in the sector globally. Aphria and Tilray Join Forces in Cannabis-Infused Mega Merger. This merger can be considered as a light shining at the end of an unpredictable year like 2020. Meanwhile, Tilray had $271 million loss. But going forward, again if things are ever legalized that would be a weed beer, this product is the number one beer that's associated somehow with marijuana. The deal is expected to close in the second quarter. The case for APHA stock has taken a big hit in recent months. Article printed from InvestorPlace Media, https://investorplace.com/2021/04/tlry-stock-will-likely-fall-once-the-aphria-merger-is-approved-on-april-30/. Are Canadian Pot Stocks Headed for Another Crash? (See Aphriastock analysis on TipRanks). The merger between TLRY and APHA is a reverse merger where Tilray, which is the smaller company between the two, would acquire APHA. These businesses have to start growing at some point. Moreover, vaporizing does not necessarily eliminate toxins. quotes delayed at least 15 minutes, all others at least 20 minutes. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. Learn More. Hopefully, the merger will find more than 100 million CAD in synergies to make this company profitable. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. at a special meeting on Friday, according to media reports, paving the way for the creation of the world's biggest cannabis company measured by revenue. That move was also expected to make it easier for the deal to be approved. As I had noted previously, the massive arbitrage wasn't sustainable. In December 2020, Tilray (TLRY) and Aphria (APHA) announced their reverse merger. There is also the idea of selling the news. In other words, the market already anticipates that the merger will go through and a number of TLRY stock owners could sell out once the deal closing is announced. You can go short on Tilray stock and long on Aphria stock to benefit from the merger arbitrage. There will also be significant. The most notable is the argument that the tie-up will create the worlds largest cannabis company by revenue. Second, Aphria also now owns Sweetwater Brewing. Simon said, "Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. The Cannabis ETF Another indicator that the deal will go through is that independent proxy advisory firms have recommended the deal to institutional shareholders. (See Tilray stock analysis on TipRanks). Aphria CEO Irwin D. Simon would lead the new company in a dual role as CEO and chairman, while Tilray CEO Brendan Kennedy would be a director on the board. Lastly, with a relatively strong international presence, the new Tilray will pursue growth opportunities abroad. That firm generated revenue of $67 million in 2019. In using this website you accept the terms of service and are responsible for complying with all laws and regulations, including applicable local laws. Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray ( TLRY). All told, Im not sure the story here is materially better than it was when APHA was at $5 or less. ca:apha Reddit group WallStreetBets also pumped up some marijuana stocks. They might be waiting for some kind of pop in the stock. The delayed merger vote and the new quorum requirements have raised concerns. Also, in SPACs, there can be significant arbitrage between the common stock and the warrants. As for APHA stockholders, they will get 0.8381 Tilray shares for each Aphria share that they hold. Overhead. Type a symbol or company name. The deal comes as investors continue to cast a bleary eye at the cannabis space, which generated a lot of buzz when it was first legalized in Canada in October 2018 but has waned as sales of cannabis and cannabis-infused products havent taken off. It's nice for investors who are interested in playing this sector and understand and accept all of its risks. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Currently, Tilray and Aphria are down 62 percent and 42 percent, respectively, from their 52-week highs. TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions. Anytime a company, or companies, are in a position to cut down on that, to combine assets, to rationalize like that, that's a positive development. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. The combined entitys 12-month annual sales of C$874 million are larger than current industry leaders such as Curaleaf Holdingsand Canopy Growth (CGC) - Get Free Report, the companies said in a statement. Markets welcomed the news as a sign of consolidation in the. The Tilray and Aphria merger has received regulatory approvals and APHA stockholders have also confirmed the merger. Essentially Aphria is acquiring Tilray because after the smoke clears and all the shares are exchanged, it's an all-stock transaction. Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. Tilray, Inc. and Aphria, Inc. APHA. Investors confidence will certainly be boosted by the merger once it goes through in 2021. Uber reversed its decision and reactivated the driver after being contacted by MarketWatch. This means be patient and look to average costs into TLRY stock. Nasdaq How will this merger between Tilray and Aphria affect investors in their cannabis stocks? In March 2020, I recommended investors buy the dip at $3.50. OrganiGram Holdings 2Q Revenue Misses Estimates; Shares Plunge 10%, Aphrias 3Q Sales and EPS Miss Estimates; Shares Plunge 14%, Shaw Communications 2Q EPS and Revenue Beat Estimates, Do Not Sell My Personal Information (CA Residents Only). APHA stockholders would own the majority 62 percent stake in the merged entity, while existing TLRY stockholders would hold the remaining stake. The spread has since narrowed to less than 2%. This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. However, the arbitrage opportunity has since come down greatly. The steep fall in TLRY stock from the peaks ensured that the arbitrage evaporated. The products featured have not been directly evaluated by the US Food and Drug Administration (FDA). By browsing this site, you agree to our cookies. Check your inbox or spam folder to confirm your subscription. Whats the TLRY-APHA merger date? Valuation is acceptable, but not compelling. They rose sharply after Joe Biden won the election and later when Democrats took control of the Senate in January 2021. They have lots of growing assets, they are active in every consumable product category including the so-called Cannabis 2.0 products in Canada which are derivatives like extracts, there's also beverages, marijuana-infused beverages. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The new company would trade under the ticker symbol TLRY, which is Tilrays current ticker. Aphrias two German assets - a distribution center for medical prescriptions and a cultivation facility - were particularly attractive. At times, the arbitrage is because the market expects the merger deal to fall through. We use cookies to improve your experience. ET. The combined company, which will operate under the Tilray name, will be the worlds largest cannabis company, with a market capitalization of approximately $8.2 billion. Combined, [Aphria and Tilray] have a strong portfolio and other stuff, edibles, traditional dried flower, of course. Aphria and Tilray agree to join forces, creating the worlds biggest marijuana production and distribution company with a combined value of nearly $4 billion. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Stephanie Bedard-Chateauneuf for Therefore I suspect that, although the merger is likely to go through, most investors should look for another entry point to invest in TLRY stock. . Whats the TLRY-APHA merger date and is there still an arbitrage opportunity available before the merger is complete? Action Alerts PLUS is a registered trademark of TheStreet, Inc. Take Charge of Your Money During our April Sale! So basically we can consider it a reverse merger. TipRanks->. Current share. What's happening with the TLRY and APHA merger? However, for the merger to be confirmed, it would have to be approved by TLRY stockholders. But CC Pharma actually in the most recently reported Aphria quarter, it was responsible for more than half of Aphria's sales, which tells you something about that market. Create your Watchlist to save your favorite quotes on Nasdaq.com. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. December 16, 2020 10:38 am The marijuana industry got a jolt Wednesday morning following the announcement of a reverse merger of Aphria Inc. ( NASDAQ: APHA) and Tilray Inc. ( NASDAQ: TLRY). In a research note, Bottomley told investorsthat while he believesthe companys3Q "signals a number of red flags" that could impact most cannabis operators, he is downgrading Aphriaas the stockis trading at 97% of the impliedtransactionprice with Tilray. Corinne Cardina: Let's talk about a big splashy deal. Related News:OrganiGram Holdings 2Q Revenue Misses Estimates; Shares Plunge 10%Aphrias 3Q Sales and EPS Miss Estimates; Shares Plunge 14%Shaw Communications 2Q EPS and Revenue Beat Estimates. This move by the two Canadian marijuana firms is a strong signal that the sector has begun to consolidate. Yet Aphria is the business that needs to do more of the heavy lifting post-merger. 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