Aurora Cannabis Inc. reported a second-quarter loss Thursday that missed analyst expectations due to a sharp decline in cannabis production, while writing down about $1 billion in assets as the pot giant looks to dramatically reduce spending to become profitable.
The management at Aurora used shares worth $3.2 billion to buy two companies (CanniMed and MedReleaf) in a six-month period in 2018. Not to mention the dozens of other companies they bought over the years. Today, the market valuation of Aurora is $2.13 billion. Its stock price is down 88% from all-time highs. They're losing money and running out of cash fast.
They were foolish to tout an annual grow rate of 600,000 kg of cannabis two years ago. Today, they are harvesting only 30,000 kg a quarter while selling about a third of that.
The quarterly results, presupposed by last week's corporate overhaul, mark a pivotal period for the cannabis company, which is the second-largest pot producer in the world by valuation behind rival Canopy Growth Corp.
I had a feeling that was wrong. So, I checked the market caps on Google Finance:
- Canopy Growth (TSE:WEED) :: $9.3 billion.
- Cronos (TSE:CRON) :: $3.2 billion.
- Aurora (TSE: ACB) :: $2.13 billion.
Aurora was the second-largest. Now, it's at the third position.