Aurora Cannabis Inc.
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Aurora Cannabis Inc. (ACB) Accused of Misleading Shareholders
According to the complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between September 11, 2019 and November 14, 2019, Aurora Cannabis Inc. filed its 2019 Annual Report, touting its continued year-over-year and quarter-over-quarter growth and stating that “[Aurora] expects adjusted EBITDA to continue to improve in the future due to higher sales, improved gross margins, and prudent SG&A growth.” To sustain this growth, Aurora also touted its ever-increasing capacity for production through its two largest facilities of Aurora Sun and Aurora Nordic 2. Contrary to these representations, on November 14, 2019, Aurora released first quarter 2020 results that revealed a 25% sequential decline of sales, with consumer cannabis revenue falling by 33%. On the same day, Aurora also released its Corporate Action Plan, which revealed a CA$190 million reduction in capital expenditures and a halt in construction of its Aurora Nordic 2 and Aurora Sun facilities. On this news, Aurora’s share price fell 17%, to close at $2.73. Then, on November 18, MarketWatch published an article acknowledging “investor trust could be a real issue after Aurora’s optimistic statement before Thursday’s disappointment.” On this news, Aurora’s share price fell another 16%, further damaging investors.