What Happened to SNDL in After Hours Trading?

What Happened to SNDL in After Hours Trading?

Sundial Growers (SNDL) is a Canadian cannabis company that has been making headlines lately due to its impressive stock performance. However, on May 12, 2021, the company's shares plummeted in after-hours trading, leaving investors wondering what happened. In this article, we will take a closer look at the events that led to this sudden drop in stock price.

Background of SNDL

Before we delve into the recent events, let's first take a quick look at SNDL. The company was founded in 2006 and is headquartered in Calgary, Alberta. It produces and distributes cannabis products for both medical and recreational use. SNDL's stock has been on the rise since the beginning of the year, with gains of over 400% as of May 2021.

The Recent Events

On May 12, 2021, SNDL reported itsfinancial resultsfor the first quarter of 2021. The company reported revenue of $9.9 million, which was down from the $13.9 million reported during the same period in 2020. SNDL also reported a net loss of $134 million, compared to a net loss of $71 million during the first quarter of 2020. These financial results were disappointing for investors, who were expecting better numbers.

In addition to the poor financial results, SNDL also announced that it had issued 60 millionnew sharesof stock. This dilution of shares caused concern among investors, who feared that it would lead to a decrease in the value of their shares.

Impact on the Stock Price

Following the release of SNDL's financial results and the news of the new share issuance, the company's stock price dropped by over 13% in after-hours trading. This was a significant blow to investors who had invested in SNDL, hoping to see continued growth in the stock price.

Investment Strategies

Investors who are consideringinvestingin SNDL or other cannabis companies should be aware of the risks involved. Thecannabis industryis still relatively new, and there are many unknown factors that could impact the growth of these companies. Investors should do their due diligence and research a company's financials and management team before investing.

Additionally, it's important to diversify investments across different industries and sectors to reduce risk. Investing in a single stock can be risky, as we've seen with SNDL's recent drop in stock price.

Conclusion

In summary, SNDL's recent drop in stock price was due to a combination of poor financial results and the issuance of new shares. Investors should be aware of the risks involved in investing in the cannabis industry and should diversify their investments to reduce risk. It remains to be seen how SNDL and other cannabis companies will perform in the future, but investors should be prepared for volatility in this industry.