Why Hexo Stock Plunged Today

Shares of Hexo (NYSE: HEXO) plummeted on Tuesday after the cannabis company said it planned to raise cash via a stock and warrant sale. As of 1:15 p.m. EDT, the stock was down 29%.

Hexo announced on Monday that it expected to raise approximately 50 million Canadian dollars by selling units containing stock and warrants. Each unit will contain one share of Hexo common stock and one half of a warrant that gives the holder the right to purchase stock at a preset price in the future.

Each full warrant will give the holder the right to buy one common share of Hexo for C$1.05 ($0.76). Warrant holders will be able to exercise those rights for a period of 5 years following the closing date of the offering, which is expected to be on May 21.