• Implied Volatility Surging for New Age Beverages (NBEV) Stock Options
    Zacks

    Implied Volatility Surging for New Age Beverages (NBEV) Stock Options

    Investors need to pay close attention to New Age Beverages (NBEV) stock based on the movements in the options market lately.

  • Company News For Nov 21, 2019
    Zacks

    Company News For Nov 21, 2019

    Companies in the news are: URBN, KNSA, ACB, ENDP

  • What's in the Cards for OrganiGram (OGI) in Q4 Earnings?
    Zacks

    What's in the Cards for OrganiGram (OGI) in Q4 Earnings?

    According to OrganiGram (OGI), there is hugely unmet consumer demand for CBD products.

  • The Zacks Analyst Blog Highlights: Tilray, Canopy Growth and Aurora Cannabis
    Zacks

    The Zacks Analyst Blog Highlights: Tilray, Canopy Growth and Aurora Cannabis

    The Zacks Analyst Blog Highlights: Tilray, Canopy Growth and Aurora Cannabis

  • Zacks

    Stocks Slide on Potential Trade Deal Delay

    Stocks Slide on Potential Trade Deal Delay

  • Big Marijuana Embraced Convertibles. Now They’re Under Water
    Bloomberg

    Big Marijuana Embraced Convertibles. Now They’re Under Water

    (Bloomberg) -- The bear market in pot stocks has left billions in convertible debentures underwater, meaning cash-starved companies may have to “creatively restructure” their debt or pay a bill they didn’t expect would come due.Cannabis companies hopped into convertibles in the last three years when their stock prices were soaring and traditional debt markets were largely closed to the untested, unprofitable and stigmatized sector. Issuers that tapped the U.S. markets included Canadian pot giants Canopy Growth Corp., Aurora Cannabis Inc., Tilray Inc. and Aphria Inc.Converts are a form of interest-paying debt that can be converted into stock at a set price. Investors generally buy them on the assumption that shares will appreciate, giving them the opportunity to convert at a discount. If they choose not to convert, companies have to repay the principal when they mature.That was appealing when stocks were appreciating, but the recent rout in what had been high-flying marijuana stocks has left the shares far below the conversion price -- at just the time when cash-strapped companies are finding it tough to raise capital.“We expect more companies with near-term maturities to attempt to creatively restructure their converts if they can,” said Neil Selfe, founder and CEO of Infor Financial Group Inc., a Canadian investment bank that’s active in the cannabis industry. “We are very busy on a number of restructuring and debt-related files given that the equity markets are closed.”When Tilray announced its $475 million bond in October 2018, its conversion price of $167 -- when the embedded stock option would get triggered -- wasn’t far off from where shares were trading, roughly in the $140-$150 band. Its stock has since fallen 87% to $21, meaning investors hoping to convert are banking on a more than 700% rally.Tapping the convertible market in the U.S. gave cannabis companies two significant advantages: a “quantum of capital” and access to an institutional investor base, said Iain Franks, head of convertible and equity-linked products at Cowen Inc. The convertible market in Canada is primarily driven by retail investors.“Cross-listing equities to a U.S. exchange and tapping the U.S. institutional market provides issuers and investors with certain validation that the cannabis sector is real and investable,” Franks said.There was a natural demand for cannabis convertibles in the U.S., especially from hedge funds that were quick to snap up the stocks, according to bankers familiar with the matter, who requested anonymity due to sensitivities surrounding the marijuana market.But cannabis companies’ high-risk credit profiles meant terms were generally less favorable than other issuers, at a time when the pricing environment had been stronger than ever.The summer of convertibles in 2019 meant tech companies like Snap Inc. or industrial issuers such as Fortive Corp. could get sub-1% coupons and 40%-plus conversion premiums. Meanwhile, cannabis convertibles -- many of which aren’t due to mature until 2023 -- have had 4%-plus coupons and sub-25% conversion premiums.“For investors, given how far out-of-the-money the notes are and current trading prices, the securities trade more as a fixed-income substitute with higher yield,” Franks said. “For the issuing companies, unless the valuations recover to 2018 levels, it means the securities will need to be refinanced at some future point.”Last week, Aurora became the first big cannabis company to restructure its converts. It had C$230 million of 5% notes maturing in March 2020 with a conversion price of C$13.05 per share. Shares were trading at C$4.38 when it announced that holders could convert early at a 6% discount to its recent trading price. Holders of 94% of the securities took them up on the offer.“The market was concerned about where we would get that cash to settle that liability in March,” said Aurora Chairman Michael Singer. “That’s gone a long way to strengthen our balance sheet.”However, Aurora’s shares tumbled 29% in the two days after it announced the early conversion, which will dilute its share count by approximately 6%.“Financings like this at these levels are massively dilutive to existing shareholders and it isn’t a surprise that they would react negatively,” said Infor’s Selfe.The average retail investor was probably unhappy at the dilution but it provided an appealing option for institutional holders, who can see long-term value in a company that may otherwise have run out of cash, according to Cowen analyst Vivien Azer.“Ultimately what will benefit these retail investors is more institutional money coming into these stocks and driving down volatility and making more capital available to drive share prices higher,” Azer said. “If this is what needs to happen to clean up these stories so we can get incremental institutional capital in these names, everyone benefits.”To contact the reporters on this story: Kristine Owram in New York at kowram@bloomberg.net;Crystal Kim in New York at ckim426@bloomberg.netTo contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Scott Schnipper, Richard RichtmyerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Have marijuana Stocks Finally Bottomed out?
    Zacks

    Have marijuana Stocks Finally Bottomed out?

    Have marijuana Stocks Finally Bottomed out?

  • U.S. Shelves Plan to Sharply Cut Nicotine in Cigarettes
    Bloomberg

    U.S. Shelves Plan to Sharply Cut Nicotine in Cigarettes

    (Bloomberg) -- U.S. regulators are hitting the brakes on plans to force tobacco companies to drastically reduce addictive nicotine in cigarettes, retreating on an ambitious public-health initiative that comes amid increasing worry about nicotine use among young people.The Department of Health and Human Services has dropped a proposal unveiled two years ago to cut the level of nicotine in cigarettes to non-addictive levels, according to a regulatory document published on Wednesday.Abandoning the plan, which almost certainly would have meant a sharp reduction in tobacco sales, would be a major victory for the tobacco industry. The move also comes at a time when public debate is focused on the potential for e-cigarettes to create a new generation of nicotine addicts.Representatives for the Food and Drug Administration and the Department of Health and Human Services didn’t immediately respond to requests for comment. Shares of Altria Group Inc., the maker of Marlboro cigarettes, closed up 3.2% in New York. Philip Morris International Inc. was little-changed.In a notice posted on a government website earlier this year as part of the Food and Drug Administration’s near-term regulatory goals, the agency said that the policy “would have significant public health benefits for youth, young adults, and adults, as well as potentially vast economic benefits.”That goal, once included as part of the “unified agenda” of regulations the government is working on, is no longer listed on the website, which was updated Wednesday as part of a semiannual review.FDA spokesman Michael Felberbaum said that the removal of the plans “does not mean the agency does not consider them a priority or will not continue to work on their development.”“The agency has focused on regulations that reflect its most immediate priorities,” Felberbaum said in an email. “FDA continues to gather evidence and data on an ongoing basis regarding all tobacco products.”Ambitious PlanIn 2017, then-FDA Commissioner Scott Gottlieb said he wanted to reduce nicotine levels in cigarettes and other burnt tobacco to near-zero. Almost half a million people in the U.S. die each year from tobacco-related causes, according to the Centers for Disease Control and Prevention, and the move was hailed at the time as a potentially monumental public-health decision. One estimate published in the New England Journal of Medicine projected it could save 2.8 million lives by 2060, and millions more in later decades.“If the FDA abandons its plan to limit nicotine levels in cigarettes, it will miss an unprecedented opportunity to improve health and save lives,“ said Matthew Myers, president of the advocacy group Campaign for Tobacco-Free Kids.The proposal also shocked Wall Street, sending stocks of tobacco giants including Altria plunging as investors reconsidered whether people would bother smoking a cigarette without the addictive chemical. The move was paired with a decision -- later reversed -- to give e-cigarette makers extra time to keep their products on the market without regulation.Gottlieb left the FDA before the nicotine policy could be seen through. Altria later bought a $12.8 billion stake in e-cigarette market leader Juul Labs Inc., a hedge against declining smoking rates.“The effort to lower nicotine in cigarettes is a central part of our effort to reduce death and disease from tobacco,” Gottlieb said in response to a request for comment from Bloomberg. “It’s critical we all maintain our commitment to these public health goals.”Another former FDA commissioner, Robert Califf, said on Twitter that the change marked “a sad day for future grandchildren. They will have fewer grandparents because of this.”Altria spokesman Steven Callahan declined to comment.The update to the U.S. regulatory agenda was published on the same morning that a Senate panel was considering the nomination of Texas oncologist Stephen Hahn to be the new head of the FDA. At that hearing, Hahn was peppered with questions about the agency’s approach to the e-cigarette industry. This year, government data has shown a surge in use of e-cigarettes by teens, and thousands of Americans have suffered serious lung injuries after vaping.The Trump administration had vowed tough curbs on flavored vaping products in September. Since then, however, the president has signaled any effort to clear the market of flavored products that appeal to young people is on hold.The FDA’s oversight of the tobacco industry was the product of a pitched political battle that began in the 1990s and culminated in a 2009 law giving the agency oversight of cigarettes and other smokeless products.Recently, some administration officials have questioned the FDA’s role in regulating tobacco. Joe Grogan, the head of the White House Domestic Policy Council, earlier this month called the FDA’s regulation of tobacco “a huge waste of time” and said the agency should focus on pharmaceuticals.(Updates with estimate on potential lives saved in ninth paragraph)\--With assistance from Tiffany Kary.To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.netTo contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy AnnettFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Can Bill Hopes Relieve Earnings-Induced Pain in Pot ETFs?
    Zacks

    Can Bill Hopes Relieve Earnings-Induced Pain in Pot ETFs?

    A wave of disappointing earnings caused a bloodbath in marijuana ETFs last week. However, talks of an end to the federal embargo on marijuana could turn this segment around.

  • The Zacks Analyst Blog Highlights: JPMorgan Chase, Altria, ConocoPhillips, The Travelers Companies and Twitter
    Zacks

    The Zacks Analyst Blog Highlights: JPMorgan Chase, Altria, ConocoPhillips, The Travelers Companies and Twitter

    The Zacks Analyst Blog Highlights: JPMorgan Chase, Altria, ConocoPhillips, The Travelers Companies and Twitter

  • Improve Your Retirement Income with These 3 Top-Ranked Dividend Stocks - November 20, 2019
    Zacks

    Improve Your Retirement Income with These 3 Top-Ranked Dividend Stocks - November 20, 2019

    The traditional approaches to retirement planning are longer covering all expenses in nest egg years. So what can retirees do? Thankfully, there are alternative investments that provide steady, higher-rate income streams to replace dwindling bond yields.

  • Myovant Up on Successful Completion of Prostate Cancer Study
    Zacks

    Myovant Up on Successful Completion of Prostate Cancer Study

    Myovant's (MYOV) phase III study evaluating lead pipeline candidate, relugolix, in patients with advanced prostate cancer meets primary endpoint.

  • Yes, You Can Time the Market. Find out How - November 20, 2019
    Zacks

    Yes, You Can Time the Market. Find out How - November 20, 2019

    Is the ability to time the markets more of a data-driven science or a 'gut - feeling' art?

  • Cronos (CRON) Catches Eye: Stock Jumps 9.1%
    Zacks

    Cronos (CRON) Catches Eye: Stock Jumps 9.1%

    Cronos (CRON) saw a big move last session, as its shares jumped more than 9% on the day, amid huge volumes.

  • Investing.com

    StockBeat: Canopy Growth Back on Buy List, BofA Says

    Investing.com – Canopy Growth has plunged in recent months to levels that finally make it worth buying, Bank of America said on Wednesday, sending shares of the Canadian cannabis producer sharply higher.

  • 5 Corporate Giants That Popped After Latest Earnings Release
    Zacks

    5 Corporate Giants That Popped After Latest Earnings Release

    A few corporate behemoths that reported their last earnings results less than five weeks ago, popped after releasing earnings results.

  • Altria Rises 4%
    Investing.com

    Altria Rises 4%

    Investing.com - Altria (NYSE:MO) rose by 4.03% to trade at $48.82 by 11:45 (16:45 GMT) on Wednesday on the NYSE exchange.

  • Investing.com

    Stocks - Target, Lowe’s Rise Premarket; Urban Outfitters Falls

    Investing.com - Stocks in focus in premarket trading on Wednesday:

  • Top Research Reports for JPMorgan, Altria Group & ConocoPhillips
    Zacks

    Top Research Reports for JPMorgan, Altria Group & ConocoPhillips

    Top Research Reports for JPMorgan, Altria Group & ConocoPhillips

  • Pfizer Gets FDA Approval for Biosimilar of AbbVie's Humira
    Zacks

    Pfizer Gets FDA Approval for Biosimilar of AbbVie's Humira

    The approval of Humira biosimilar is the fourth U.S. approval of a biosimilar product for Pfizer (PFE) in 2019.

  • How Many Canopy Growth Corporation (TSE:WEED) Shares Do Institutions Own?
    Simply Wall St.

    How Many Canopy Growth Corporation (TSE:WEED) Shares Do Institutions Own?

    If you want to know who really controls Canopy Growth Corporation (TSE:WEED), then you'll have to look at the makeup...

  • Altria Falls 3%
    Investing.com

    Altria Falls 3%

    Investing.com - Altria (NYSE:MO) fell by 3.02% to trade at $46.88 by 15:05 (20:05 GMT) on Tuesday on the NYSE exchange.