Sundial Growers (SNDL) stock was down by over 8% yesterday, and down by 80% in the past month. So, why investors lost their interest in this stock recently?
The company raised capital by issuing shares and used them to repay its all outstanding debts. This is a good news, but the price is "massive share dilutions". The company now has 1.66 billion shares outstanding. it is crazy for a company without profits.
Sundial is a Canadian company operating with a small share of a smaller market than the U.S., and the company's market share in Canada declined in the fourth quarter compared to the previous quarter, it is not a well trend for the company.
The report from the company's Q4 and FY2020 financial results shows that its net revenue of 2020 was $61 million, a decrease of 4% of 2019, and its net loss of 2020 was $240 million, an increase of 12% of 2019, it is worth to note that the company's gross margin saw a decrease of 46%, which compared to 2019.
Although its stock price is not high, its market value is high. The company is currently facing problems such as declining sales, accelerating losses. Those hedge funds seem to have reasons to short the stock, so, the retail investors need to handle this stock with cautious.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.