Shares of Canopy Growth (NASDAQ: CGC) jumped as much as 11.9% early Tuesday, then settled to close up 6.2% after the cannabis company terminated a previously announced private placement of new shares.

Recall Canopy Growth shares plunged last week after the company announced an agreement to sell over 6.99 million new shares of stock to some existing institutional investors at a price of $4.29 per share -- well below its previous day's closing price of $5.04 per share -- as well as warrants to purchase additional shares at a price of $4.83 per share. Canopy said at the time it would use the gross proceeds from the sale of roughly $30 million to pay down debt, as well as for working capital and general corporate purposes.

In a Securities and Exchange Commission (SEC) filing over the weekend, however, Canopy Growth revealed that following the announcement and prior to its expected closing on Jan. 10, 2024, it received word that one of the third parties involved with the deal couldn't "complete certain tasks in a timely manner," which in turn prevented Canopy Growth from satisfying the closing requirements of the transaction for now. As such, Canopy Growth terminated the subscription agreements related to the private placement, and no new shares of common stock will be sold for now.

Continue reading

Source Fool.com