New Cannabis Stock Australis Capital Opens at $10, 50 Times Higher than Private Placement Round

Cannabis stocks are in a bull market, no doubt, but things are getting crazy! No, I am not talking about Tilray (NASDAQ: TLRY) trading to $236 today. Rather, the latest parabolic spike is in the first day of trading of Australis Capital (CSE: AUSA),  a recent spin-off of Aurora Cannabis (TSX: ACB) (OTC: ACBFF). The company is pursuing cannabis opportunities in the U.S.

Aurora Cannabis announced the spin-off in June, and the the stock has a fully-diluted share-count of about 145 million shares according to the Filing Statement. It priced a private placement round at $0.20 recently, raising $17 million. The first trade this morning  when it opened at 10 ET was at $10.00, or 50 times the deal price, giving it a market cap of C$1.45 billion. Thus far the company, which just commenced operations, has little more than the funds from its deal and to letters of intent.

Despite the big jump in price on the open, traders have continued to buy, apparently not cognizant of millions of warrants at $0.25 that were distributed to Aurora shareholders. The stock has pulled back as we publish, but it traded as high as 13 (data from The dollar volume is already in excess of $11 million.

Breaking News by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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