In a detailed description of Aurora’s 2020 (non?) performance amongst other things they say…. What a company! What a mess.
If Aurora Cannabis has taught investors anything, it’s that cheap stocks are usually cheap for a reason. We’ve also learned that not all stocks in a high-growth industry can be winners.
Aside from continuing to dilute its shareholders at an extraordinary pace, poor decisions by management have also proved how little they care about their investors.
In fiscal 2020, Aurora Cannabis reported a CA$3.3 billion net loss, which was magnified by more than CA$2.8 billion in writedowns and impairment charges. While some of these charges were tied to the closure of the company’s smaller cultivation facilities and to layoffs, most relate to the company’s grossly overpriced acquisitions.
For example, Aurora paid a jaw-dropping CA$2.64 billion in an all-share deal to acquire licensed producer MedReleaf in 2018. The expectation when this deal closed was that MedReleaf would support 140,000 kilos of annual marijuana production. Ultimately, Aurora sold the Exeter facility (which was never retrofit for pot production) for a meager CA$8.6 million. It was expected to yield 105,000 kilos of the 140,000-kilo estimate. The smaller Markham facility (7,000 kilos a year) also got the ax. Aurora effectively paid a net of CA$2.63 billion for 28,000 kilos of annual output and a handful of proprietary brands. Decisions like this have doomed the company’s shareholders.
Management also received hefty pay raises in 2020 for meeting some of the company’s key performance indicators for the year. That’s right — as Aurora’s future remains in doubt and the company continues to sell its own stock at the detriment of shareholders to raise capital, it’s raising its executives’ pay.
What a company! What a mess.
Read the full article at…. https://www.fool.com/investing/2020/10/29/aurora-cannabis-the-11800-gain-no-one-saw-coming/