What happened
It's safe to say that no one caught a pleasant buzz from Tilray Brands (TLRY -5.30%) stock on Friday. The Canada-based marijuana company saw its shares sink by slightly over 21%, following news of yet another round of capital raising. By comparison, the S&P 500 index had a good Friday, advancing by 1.3%.
So what
After market hours on Thursday, the ever cash-strapped Tilray announced it had launched a registered offering of $150 million worth of convertible senior notes. In a subsequent press release it set the pricing of those securities.
The notes mature on June 15, 2027, and their annual interest rate is 5.2%. That interest will be paid semi-annually. The notes are convertible at any time into Tilray common shares, with the initial conversion rate being just over 376.6 shares per $1,000 principal amount. This represents a price of around $2.66 per share. Tilray retains an option to redeem the notes at any time after June 20, 2025 for cash.
Additionally, the underwriters of the marijuana company's issue have been granted a 30-day option to purchase up to $22.5 million in total worth of the notes.
Tilray said that it plans to use the proceeds from the issue mainly to redeem previously issued convertible senior notes. It will use a small portion of the funds for "general corporate purposes," about which it did not elaborate.
TLRY Tilray Brands
NASDAQ · As of 4:00 PM ET 10/16/26
Now what
Investors are surely getting that "here we go again" feeling with Tilray, which like many pot companies has struggled with weak cash flow and frequent bottom-line losses -- and floated debt and equity to keep itself going. Another convertible notes issue means more debt, more dilutive equity coming to the market, or a combination of both. It's doubtful this latest offering will turn things around for the beleaguered company.
