After the announcement BaM shares quickly dropped as investors took note that AUSA just bought in for $0.40, for 1 share + 1 warrant.
BaM was trading in the $0.60-$0.70 range at the time of the deal and had even shot up to $1.20 earlier this month, so this seems like it would hurt BaM shareholders in the short term, but is a potential huge win down the road if they are able to grow quickly with AUSA’s and Aurora’s backing.
Australis is Aurora’s (ACB.T) investment arm, similar to Canopy Rivers. Australias is a relatively newer company that is going to be doing these types of the deals in the future to boost their portfolio.
Australias mentioned they were interested in BaM’s line of products which include :dried flower, edibles, topicals, extracts as well as GPEN Gio cartridges. BaM marijuana strains have also won numerous awards including the Las Vegas Hempfest Cup 2016, High Times Top Ten, the NorCal Secret Cup and the Emerald Cup.
We have written on why we think BaM is an undervalued company, it looks as though Australis shares this belief.
It’s likely that because Australis’s success is in Aurora (and its shareholders) best interest, Aurora could play a major role in scaling any company Australis invests in. Not only is Auroras management heavily invested in the company, Aurora shareholders each got shares of Australis at a ratio of 1 AUSA share per 33 Aurora shares purchased before August 24th, 2018.
Even though BaM is down today, investors have to think that long term this is a huge win for the company. Having a giant like Aurora in your corner could be the determining factor in beating out an overly saturated market down the road.
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