Hexo Stock Tumbles After Pot Firm Cuts Quarter of Workforce
(Bloomberg) -- Hexo Corp. is cutting almost a quarter of its workforce two weeks after the beleaguered pot company said it wouldn’t meet revenue guidance this year or next.
Shares fell as much as 7.4% after Hexo announced the job cuts, including the departures of Chief Manufacturing Officer Arno Groll and Chief Marketing Officer Nick Davies. The stock has now lost about 40% since Oct. 4, when the company said its chief financial officer would depart after about four months on the job.
Hexo said it had 822 employees in its last quarterly report in June.
“While it is extremely difficult to say goodbye to trusted colleagues, I am confident that we have made sound decisions to ensure the long-term viability of Hexo Corp.,” Chief Executive Officer Sebastien St-Louis said in a statement. “The actions taken this week are about rightsizing the organization to the revenue we expect to achieve in 2020.”
Hexo will release fiscal fourth-quarter results on Oct. 28, a delay from the previously scheduled release that was planned for Thursday.
The Gatineau, Quebec-based company said Wednesday that it will raise C$70 million through a private placement of unsecured convertible debentures. CIBC analyst John Zamparo said the decision to raise money in the midst of a stock slump was “curious.”
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