Two stories that stood out today was Tilray’s (TLRY.Q) epic rise and fall, as well as the Australis (AUSA.C) IPO.
We wrote a piece outlining Tilray’s low float which is embedded into the share structure. Tilray’s CEO owns around 75 million of the 90 million shares out, this tips the supply and demand ratio heavily in the companies favour.
Australis on the other hand is an Aurora backed company who had a ton of hype behind its IPO this morning. The company did a recent financing at $0.25 and shocked everyone when it opened at $10.00, it rose as high as $16.00 and closed at $2.90, the selloff of the $0.25 was inevitable.
Even worse for those who bought AUSA the open, it’s been widely reported that Aurora shareholders have not received their Australis shares that they were entitled to. For every 34 shares of Aurora purchased before August 24th, 2018 the shareholder is entitled to one Australis share. If a large number of Aurora investors sell their Australis shares, this stock could dive a lot deeper.
The AUSA IPO was a lesson for investors to do their due diligence and not buy purely based on hype of fear of missing out. The sector is starting to heat up very quickly, it’s easy to get caught up in the emotion and adrenaline. Many may fear that the Canopy Rivers IPO tomorrow morning may have a similar outcome as the demand for fresh cannabis IPO’s are so high right now.