What happened
Canadian pot company Sundial Growers (SNDL 3.08%) reported fourth-quarter and full-year 2021 results last night, and the market was selling its stock today. After dropping nearly 6% at the lows of the day, Sundial shares finished down 3.98% on Thursday.
So what
While its fourth-quarter revenue increased 63% from the prior-year period to about $17.7 million, the company still reported a net loss of almost $43 million for the quarter and $180 million for the full year. Investors today might be looking at those full-year results and losing patience as the 2021 loss grew by 11.5% over its 2020 net loss.
Image source: Getty Images.
Now what
In 2021, Sundial worked to reinvent its business by focusing on cannabis-sector investments as well as its core growing operations. The company deployed another $56 million of capital to its investment segment in the fourth quarter. That brought it to a total of about $450 million in capital deployed among several cannabis-related investments in 2021.
But the core business is still struggling to overcome dropping prices. The average net selling price from its cultivation and production operations was 14% lower in 2021 year over year.
Both the company and investors are counting on the investment portfolio to help turn the company around. As of April 25, it still had a cash balance of almost $300 million for investments. But that cash came at the expense of existing shareholders. It raised capital by selling shares that have resulted in an increase in share count by more than 1,800% just since the middle of 2020.
The most recent results aren't giving shareholders much incentive to stick around, and they are showing that displeasure by selling the stock today.
