Sundial Growers Inc. (SNDL) stock declined by 0.88% at the last trading close whereas the SNDL stock surges by 3.54% in the pre-market trading session. There is no recent news hitting the media related to this up and down in SNDL stock price. Sundial is a publicly-traded company, with its Common Shares trading under the symbol “SNDL” on NASDAQ. Sundial is a licensed cannabis producer with state-of-the-art indoor facilities.
What is happening?
If there is one thing which can be considered positive about Sundial, it is that it is flush with cash. SNDL stock had $719 million Canadian ($570 million US) in cash on hand as of March 15. With this, Sundial is able to implement whatever growth plan, management has in mind.
On the other hand, shareholders have been completely ignored by the management of SNDL stock. While share-based dilution has become the standard in Canadian marijuana stocks over the last four years, Sundial’s dilution has been extreme. The company issued 1.15 billion shares in five months, more than tripling the number of outstanding shares. That’s not a small amount, particularly considering the company has filed a proposal to sell up to $800 million in additional common stock through at-the-market offerings.
Sundial’s massive outstanding share count (1.66 billion) would make it nearly impossible for SNDL to produce significant earnings per share, or even to remain above the $1 minimum listing level on the NASDAQ market, despite raising a ton of money and erasing its debt.
With no accurate reason being given for the current change in SNDL stock, the outlook on its past performance shows an uncertain future of Sundial Growers. Due to SNDL’s share-based dilution, it seems like that the investors are also not sure about making a long-term bet in SNDL shares.