The sudden departure of the executive has put doubt in the minds of investors
In order to guarantee recovery from a rough year in the stock market, some cannabis companies had to make drastic decisions to stay afloat. Aurora Cannabis Inc. seems to be reorganizing the house and announced yesterday the retirement of Chief Executive Terry Booth in a first step for “sweeping changes” to come. The Canadian licensed producer is one more company that is cutting down costs due to cash deficits. This business decision manifested in a fall in the stock price for Aurora.
It could seem like a tough hit for the company, but it might be worth it in the long rung as Aurora outlined this to be a “business transformation plan.” It is not good news for everyone, though, as this plan includes large cuts in the size of its working force as well as some assets that will get cuts in the valuation. That valuation is expected to be updated by the report of the fiscal second-quarter 2020 this month. In the US, Aurora’s shares fell over 16% last Friday while on premarket trade. And on Thursday afternoon following the news in the afternoon, the stock price went down 5.6% to $2.
Michael Singer will become interim CEO and the company will enter a phase in which 500 full-time staff positions, around 15-18% of the workforce, will be cut. Last September, Aurora said it has around 2,779 employees and, during the fall, there were 3,000. “We believe that the long-term opportunity for Aurora remains very compelling, despite a slower-than-anticipated rate of industry growth in the near-term,” Chief Financial Officer Glen Ibbott said. “We also believe our approach to rationalizing the business and conservatively improving our balance sheet positions Aurora in a more stable position for sustainable growth going forward.”