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Irwin Simon: Aphria Is Worth More than Green Growth’s Offer

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Jan. 24 2019, Updated 3:05 p.m. ET

Aphria is worth more

Irwin D. Simon, the new chairman of Aphria’s (APHA) board, provided reasons why the company is worth more than Green Growth’s offer. He gave four key factors that contribute to Aphria’s value. He mentioned “industrial-scale production, pharmaceutical-grade quality, innovative product development, and industry leading partnerships.”

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Valuations

In Cannabis Players’ Valuations: Which Stocks Look Cheap in January?, we discussed that Aphria’s valuation multiples were trading at a discount compared to its peers (HMMJ) including Canopy Growth (WEED) (CGC), Aurora Cannabis (ACB), and Tilray (TLRY).

Most of the decline in Aphria’s valuation resulted from a significant decline in the company’s stock price after it came under fire from short sellers. The short sellers questioned the company’s recent acquisition in LATAM (Latin America). However, taking a cue from those reports, Bloomberg went over to the LATAM market to confirm the short sellers’ claim. Read Did Aphria’s Questionable Acquisitions Get Validation? to learn more.

In the following days, we’ll closely watch what Aphria’s committee provides in its recommendation about Green Growth’s formal offer.

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