AURORA CANNABIS STOCK ANALYSIS - MARIJUANA STOCKS | Summary and Q&A

TL;DR

Aurora Cannabis, a growth marijuana stock, has made acquisitions and utilized convertible loans, leading to dilution of shareholders and raising questions about its business model and valuation.

Key Insights

• 🤨 Aurora Cannabis has faced criticism for diluting shareholders through acquisitions and convertible loans, which raises questions about the company's business model and shareholder value.
• 🥳 The valuation of Aurora Cannabis is influenced by factors such as its price-to-sales ratio, scalability projections, sales and marketing costs, profitability projections, and potential future dilution.
• 👨‍💼 Rapidly scaling production comes with operational, dilution, pricing, and investment risks, making the business model of Aurora Cannabis uncertain and potentially risky for investors.
• 👏 The use of convertible debentures for financing allows investors like Canaccord to benefit from potential stock price increases while limiting their risk, but it raises questions about the company's profitability and the need for such loans.
• ✳️ Aurora Cannabis's growth projections heavily rely on the assumption of increased demand for cannabis, but there are market risks associated with this assumption.
• 🔬 Investors should consider the risks and benefits of investing in cannabis stocks, as they are volatile and subject to various uncertainties.
• 🔬 Dilution of shareholders is a significant concern when investing in companies like Aurora Cannabis, as it can impact shareholder value and stock prices.

Transcript

good day fellow investors a lot of you asked me to analyze Aurora cannabis when I analyzed canopy growth just a note on cannot be growth I have been contacted by their investor relationships and they want to have a chat with me on the phone so I will talk to them I really want to hear their version of what I have said perhaps I said something wrong... Read More

Questions & Answers

Q: Why has Aurora Cannabis faced criticism for diluting shareholders?

Aurora Cannabis has faced criticism for diluting shareholders because of its acquisitions and convertible loans, which raise concerns about the value for shareholders and the company's business model.

Q: What risks are associated with Aurora Cannabis's goal to increase production by a hundred times?

Rapidly scaling production can lead to operational, dilution, pricing, and investment risks, making the business model of Aurora Cannabis uncertain and potentially risky for investors.

Q: How has Aurora Cannabis utilized convertible debentures from Canaccord for financing?

Aurora Cannabis issued two hundred million of convertible debentures from Canaccord, allowing Canaccord to benefit from potential stock price increases while limiting their risk. However, this raises questions about the need for such loans and the company's profitability.

Q: What factors contribute to the valuation of Aurora Cannabis?

Aurora Cannabis's valuation is influenced by factors such as its acquisition strategy, dilution, scalability of the business model, sales and marketing costs, profitability projections, and potential future dilution.

Summary & Key Takeaways

• Aurora Cannabis has acquired Kahneman and diluted shareholders by 19%, leading to concerns about dilution and shareholder value.

• The company has utilized convertible debentures from Canaccord for financing, raising questions about profitability and the need for such loans.

• Aurora Cannabis aims to increase production to 430,000 kilograms per year, but there are operational, dilution, pricing, and investment risks associated with such rapid growth.