In December 2020, Aphria and Tilray announced their reverse merger deal whereby it was confirmed that after these two firms will merge, they will form the largest cannabis company in the industry. For once, this announcement boosted the stocks of both companies because it came up as good news. Afterward, the stock of Aphria went down. The value of the stock has thereafter reduced a little.

Reason for this Downfall

Not all investors are happy with the news of this merger. While the stock of Aphria went down, on one hand, the stock of Tilray went up on the other. The reason for the rise in the stock value of Tilray is that its shareholders will get paid a premium because of this merger deal.

If we consider overall, then Aphria has proved to be a more stable and constant company instead of Tilray. Tilray suffered losses this year but Aphria is way too solid for that matter. The investors are mainly concerned about the deal because it could also make things worse rather than making the companies stronger.

Stock Analysis: Aphria Inc. (NASDAQ: APHA) and Tilray Inc. (NASDAQ: TLRY)

Aphria Inc. (NASDAQ: APHA)

  • 52 Week Range: $1.95 – $8.88
  • Average Volume: 11,420,290
  • Market Capital: $1.997B
  • Forward Dividend and Yield: N/A (N/A)

Tilray Inc. (NASDAQ: TLRY)

  • 52 Week Range: $2.43 – $22.95
  • Average Volume: 19,919,441
  • Market Capital: $1.307B
  • Forward Dividend and Yield: N/A (N/A)

The Fate of the Stock of Aphria Inc. (NASDAQ: APHA)

Despite the recent downs that the company is going through, Aphria does not become any less of a solid company that it is. The investors are not much sure about the deal presently but it is expected that the deal would turn out to be something positive for both companies in the upcoming future. The deal has created one large giant in the cannabis industry with a huge market capital.

The reason that investors fear this merger deal is because of the losses Tilray has suffered. These losses might have an impact on the companies but currently, the stocks of Tilray are doing well. The Aphria stock went down after the announcement of this deal.

Aphria, in no case, has become a stock categorized as ‘Bad Buy’. The shareholders might not expect very immediate profits coming from the company but eventually, over time, the situation will become better. Therefore, the stock of Aphria can be considered for making a long term investment. This deal has several benefits that might not come to light all at once but eventually, the deal will turn out to be better as per the analysts.

The lowering down of Aphria’s stock has nevertheless made it a bit speculative when it comes to investing because investors want to invest in a profit giving stock. Presently, there is a little risk involved when it comes to Aphria. Therefore, investors can either wait or think about making a long-term investment in this company.

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