In 2020, one of the most significant developments in the legal cannabis sector was the announced merger of leading Canadian Licensed Producers (LPs) Aphria Inc. (APHA.TO) (APHA) and Tilray, Inc. (TLRY).
After the definitive merger agreement was announced, we published a series of articles on the growth profile of the combined company. We are bullish on the growth prospects that are associated with the combined company and expect it to benefit from having additional resources and substantially more market share in Canada and in strategic international markets.
Today, we want to highlight a separate topic of the transaction that relates to Tilray especially since it will be the surviving entity of the merger. So far this year, the Canadian LP has issued several stock grants to insiders and c-level executives. While this type of activity is completely normal, we believe our readers should be aware of the trend.
2020 was a challenging year for the global economy as the COVID pandemic negatively impacted all types of business. Many companies tried to cut costs to survive the pandemic and accomplished this through stock award programs.
We were recently analyzing Tilray’s SEC insider transaction filings and noticed that executives were reporting large stock grants (especially when you value the positions at the current share price) from previously announced equity incentive initiatives.
Typically, we would not highlight this type of insider trading activity but find it to be of significance due to the three separate shareholder lawsuits that have recently been filed. Although Tilray said the plaintiffs’ allegations lack merit and that it will not disclose additional filings or subsequent amendments, we believe the recent developments are significant as the management team works to complete the merger with Aphria.
We will be closely following how the merger agreement advances and if you want to receive updates on the merger, please send an email to email@example.com with the subject “Aphria and Tilray Merger” to be added to our distribution list.
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