Is Tilray Running Out of Money?
Tilray (NASDAQ: TLRY) saw terrific sales growth in 2019, with its top line climbing from $43.1 million in the previous year to nearly four times that figure -- $167 million. However, over the past year, shares of the Canadian cannabis producer are down more than 85%, which is even worse than how the Horizons Marijuana Life Sciences ETF has performed -- down 71%.
Investors are expecting more from pot stocks as concerns mount that there may be many bankruptcies this year as companies run out of money. Tilray's burned through a significant amount of cash as well. But let's take a closer look to see just how much of a problem its cash burn is and if it should prevent investors from buying shares of the company.
As of Dec. 31, Tilray had $96.8 million in cash and cash equivalents. A year ago, that balance was $487.3 million. In just one year's time, Tilray's burned through $390.5 million, and if it follows a similar pattern this year, the stock could be on track for an even worse year as Tilray may be left with no option but to raise more money through the equity markets, which dilutes existing shares.
Source Fool.com
