Tilray Brands, Inc., Nasdaq (TLRY) and TSX (TLRY), are asking their shareholders to vote for a reversed stock split. This will help boost the value of each share. The company announced that it will call a Special Meeting where shareholders will be asked for a vote on an amendment to its Fifth Amended and Restated Certificate of Incorporation.
The reverse split can range between 1:10 and 1:20. Board of Directors determines the ratio between these two ranges, but without reducing authorized shares of our common stocks.
The number of outstanding shares in the company is almost one billion and has increased 18.30% over the past year.
Tilray CEO Irwin D. Simon stated, “The Reverse Stock split will better align Tilray’s outstanding shares with other companies our size and scale.” Tilray would be able to implement its strategic goals if the price of each share was higher. This will ensure that Tilray meets Nasdaq’s listing requirements. We expect that this decision will help the company to achieve its goals of stabilizing trading, attracting and retaining institutional investors, and reducing our costs by more than $1 million per year. We are confident in our team and strategy to provide long-term shareholder value.
The company said in a press release that it also expects to save money from the Reverse Stock Split. This would allow the company to reduce the costs associated with the Annual Meeting of Stockholders.
Tilray announced to its investors during a recent earnings call that the company posted a quarterly net loss amounting to $793.5 Million, weighing on the performance of its stock. Since February, the Nasdaq Exchange has not allowed Tilray’s shares to trade above a dollar. The company will be considered in violation of the Exchange’s minimum bid price if it remains below $1 for more than 30 days. Nasdaq offers violators 180 day to comply and if they don’t, the can request an additional 180 days.
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This reverse split is a follow-up to the deal last year that the company made with TD Securities and Jefferies for an equity at-the market program. The company sold 93,610.801 shares in the ATM Program during the nine-month period ending February 28th 2025. This generated gross proceeds of $143.42 million. In addition to the $3.7 million paid in commissions, other fees and related costs associated with this issuance generated net proceeds of $143.4 million.
Tilray is not the first company to reverse split. The reverse split had a cumulative effect in 2021 of 1:1.19. This means that 1,19 pre-splits shares were converted into one share after the split.