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Yesterday, HEXO’s executives, directors and shareholders reported their confidence by participating in a $ 70 million private placement.

HEXO issues a convertible debenture with a maturity of three years that will pay an interest of 8%. The debenture may be convertible into shares at a price of $ 3.16 each.

Buyers include CEO Sébastien St-Louis, co-founder Adam Miron and five of the six directors, including Nathalie Bourque and Michael Munza


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CIBC ANALYST

“As the funds do not seem necessary to execute existing plans, we believe the possibility exists that the company is looking to expand into the U.S. CBD market via acquisition,”

John Zamparo wrote in a research note late on Wednesday.

“We project HEXO would not encounter potential capital shortfalls until mid-2022,” he wrote. “The decision to raise equity in these conditions is curious.”


DESJARDINS ANALYST

The Desjardins analist, Mr. Chu sees the financing a good eye, because it adds to the $ 188 million of liquidity already in the balance sheet.

“Hexo will therefore have all the financial flexibility to realize its strategy and expand”

The analyst expects to adjust its forecast and target price after the fourth quarter earnings report, which was postponed from October 24 to October 29, due to the private placement.

Mr. Chu still maintained a buy recommendation and a high target price of $12.50


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This article is written and published by The Cannabis Stock


Disclaimer : The Cannabis Stock wants to promote the cannabis market with the best publication on the market. The Cannabis Stock does not recommend selling or buying any of the company mentioned and is not responsible for any losses that may result.


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