Cannabis firm Tilray Brands (TLRY) is planning to undertake a reverse stock split.
Tilray’s stock currently trades at $0.45 U.S. per share on the Nasdaq Composite exchange and the company is in danger of having its shares delisted if it can’t get the price back up to $1 U.S.
Reverse stock splits artificially inflate a share price. In Tilray’s case, the split could help to get the struggling stock back above $1 U.S.
Tilray Chief Executive Officer (CEO) Irwin Simon says the company will ask its shareholders to approve a plan that would allow a reverse stock split of its common shares at a ratio ranging from 1-to-10 or even 1-to-20.
The exact ratio will be determined by Tilray’s board of directors should the plan be approved by shareholders in a vote scheduled for June 10 of this year.
Tilray’s financials and share price have struggled since the company went public in 2018.
Originally based in Canada, expectations were high for Tilray’s legal cannabis dispensary business.
But the company struggled to compete against the black market for cannabis in Canada, and the hoped for national legalization of the recreational drug in the U.S. never materialized.
As a result, Tilray’s sales and its stock have plummeted. After peaking near $150 U.S. a share in 2018, Tilray’s stock has fallen all the way down to $0.45 U.S. per share.
The company has relocated its headquarters to New York City and diversified into selling alcohol as well as cannabis. But, so far, nothing has managed to stop the company’s decline.
Tilray’s stock has lost 99% of its value since going public in 2018.