What happened

Shares of Aurora Cannabis (NYSE:ACB) fell 7% on Monday after the marijuana company conducted a reverse stock split.

So what

After brutal losses in recent months, Aurora's stock price fell below $1 per share. In order for its shares to continue trading on the New York Stock exchange, Aurora needed to take action to boost its stock price. That action came in the form of a reverse stock split, which resulted in shareholders receiving 1 share for every 12 they owned. 

The popular pot stock has fallen on hard times. Mounting operating losses and dwindling cash reserves have investors concerned that Aurora could run out of cash before it reaches sustained profitability.

A man with his head down on a table in front of a stock chart that rises and then plunges

It hasn't been easy being an Aurora Cannabis investor. Image source: Getty Images.

Now what 

Aurora is expected to raise additional capital to bolster its cash reserves. However, by selling more shares to the public, Aurora would dilute existing shareholders' ownership. 

After seeing the value of their shares plummet and the number of their shares reduced by more than 90% due to the reverse split, it appears that some investors have simply had enough.

Still, Aurora Cannabis will have an opportunity to give its remaining shareholders a reason to hang on when it reports its third-quarter earnings results after the market closes on May 14. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.