Aphria switches to Nasdaq from NYSE to cut costs
Cannabis producer Aphria (APHA.TO)(APHA) is moving its U.S. stock listing from the New York Stock Exchange to the Nasdaq Global Select Market in a bid to cut costs.
The Leamington, Ont.-based company said on Tuesday that its common stock will begin trading on the Nasdaq under the same “APHA” ticker when the markets open on June 8. Aphria shares will continue to trade on the Toronto Stock Exchange.
“We are excited to have Nasdaq as our new exchange partner. This move is a reflection of our ongoing commitment to find cost effective ways of operating so we can continue to deliver long-term value to shareholders,” Aphria chief executive officer Irwin D. Simon stated in a news release.
Earlier this month, Aphria reduced its debt by repurchasing a portion of convertible senior notes at a 25 per cent discount to their face value using shares priced at $4.84. The company said the transaction added $127.5 million to its net cash position.
Following that announcement, Simon told BNN Bloomberg that the company’s streamlining measures also included eliminating “less than one per cent” of its workforce of about 1,200 employees as it combined some marketing and sales teams.
Aphria’s belt-tightening has been less drastic than rivals such as Aurora (ACB.TO)(ACB) and Canopy Growth (WEED.TO)(CGC), who have each eliminated hundreds of jobs, sold units of their business and reduced their cultivation footprints amid a more challenging market.
Jefferies analyst Owen Bennett said while Aphria’s profitability track record and strong balance sheet relative to its peers largely precludes the need for aggressive cost-cutting, the company stands to save in the “low-hundreds of thousands of dollars” annually by switching exchanges.
He added there are also M&A implications.
“Against this backdrop, and in light of Aphria's strong balance sheet, and Aurora's recent acquisition of a U.S. CBD company, another possible read here could be M&A, and a move into the U.S. potentially on the radar,” he wrote in a note to clients on Tuesday. “Unlike peers, we don't see a purchase of a CBD company as the likely route.”
Simon said Aphria’s move from the NYSE to the Nasdaq also reflects its increasing focus on environmental, social and governance (ESG) business practices.
“With over 76 per cent of Nasdaq-listed companies reporting on at least one ESG metric, we welcome Aphria to the Nasdaq family as they strive to integrate ESG best practices across their business and add strategic value to all of their stakeholders,” Nasdaq global head of capital markets Bob McCooey added in the release.
Aphria’s last day of trading on the NYSE is expected to be June 5.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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