Please ensure Javascript is enabled for purposes of website accessibility

Why Hexo Was Sinking on Thursday

By Eric Volkman – Aug 26, 2021 at 3:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new arrival will soon enter the company's C-suite.

What happened

Investors weren't catching Hexo's (HEXO -1.19%) buzz on Thursday. The marijuana stock was down by over 6% in late afternoon trading, in an apparent reaction to the appointment of a new company executive.

So what

That new Hexo executive is Guillaume Jouët, who is taking the role of chief people and culture officer at the Canadian marijuana company. He will formally begin his tenure on Sept. 8.

A marijuana flower on fire.

Image source: Getty Images.

Jouët is a veteran who has served in top managerial positions across several segments of the wider consumer goods industry.

According to his LinkedIn page, his last major corporate stint was a nearly eight-year term as global chief human resources officer, chief sustainability and global communications officer at French food company Groupe Bel (makers of the Babybel and The Laughing Cow cheese products) that ended in December 2019. He has not previously worked in the marijuana industry.

In the press release trumpeting Jouët's appointment, Hexo said that he "will be a key member of our executive team as we continue to build out an intentional culture that is aligned with our corporate strategy."

Now what

Most likely, Hexo shares did not trade down on Jouët's capabilities and experience, which appear to be excellent and multifaceted.

Yet talented and seasoned executives tend to command high salaries, and Hexo is a chronic money loser. Compounding that, its shareholders just approved the company's roughly $733 million cash-and-stock acquisition of Canadian cannabis peer Redecan. Something like $416 million is to be paid in cash.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends HEXO Corp. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

HEXO Corp. Stock Quote
HEXO Corp.
HEXO
$0.17 (-1.19%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.