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 stockwatch.com). The dollar volume is already in excess of $11 million.
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