Despite a disappointing earnings report, Wall Street analysts are sticking by the stock and looking ahead to the third quarter.Marketsread more
Treasury Secretary Steven Mnuchin says if the call goes well, he would expect in-person meetings to take place.Marketsread more
Netflix shares are cratering after it missed Wall Street's target for international subscriber growth.Investingread more
Billionaire hedge fund manager Ray Dalio just picked gold as a prime long-term opportunity. Here's why one market watcher says he could be wrong.Trading Nationread more
Philip Morris International beat second-quarter earnings and revenue estimates while hiking its full-year forecast as its new tobacco products gain momentum.Health and Scienceread more
Toys R Us is opening two permanent stores in November — at Simon Property Group's Galleria mall in Houston and at Unibail-Rodamco-Westfield's Garden State Plaza mall in...Retailread more
Warren wants to make private equity firms responsible for debts and pension obligations of companies they buy and change executive compensation rules to ensure that bankers...2020 Electionsread more
Netflix blamed its content slate, regional price increases and a 'pull-forward effect' of its strong Q1 growth for the miss.Technologyread more
Revenue of $10.24 billion exceeded the consensus estimate by almost $250 million.Financeread more
The pace of companies moving production out of China is accelerating, according to the Nikkei Asian review.Marketsread more
Raymond James upgraded Apple and said its most recent checks show Apple is preparing to bring a 5G iPhone to a wider range of models than previously thought.Marketsread more
Tilray shares surged more than 13% Monday in premarket trade after the Canadian pot company announced it struck a deal with its majority shareholder, a cannabis company backed by venture capitalist Peter Thiel, to sell the fund's stake gradually over the next two years.
Privateer Holdings, a private equity fund concentrated in the cannabis sector, formed Tilray in 2013 and took it public last summer. Thiel's Founders Fund was an early backer of Privateer in 2014.
Privateer holds 77% — 75 million shares — of Tilray's outstanding shares worth roughly $2.91 billion at Friday's closing price of $38.80. That stake was worth more than $16.05 billion at the company's peak price of $214.06 in September.
Short sellers have bet Privateer would flood the market with Tilray shares, with 24.2% of the float currently shorted, according to FactSet. The deal sets up a schedule and conditions for Privateer's stake to be released over the next two years, which Tilray hopes will clear the stock overhang.
Tilray will acquire Privateer in a downstream merger, releasing Privateer's current stake to the market over the next two years in what is expected to be a tax-free deal for the fund's investors. In the first year following the transaction, shares will be sold to institutional and strategic investors, which Tilray will determine. Remaining shares will be released over the second year at a staggered rate.
"Privateer is giving Tilray a lot of operational flexibility and obviously believes in long-term value of this business and is not pushing to sell its shares as soon as possible, so it's kind of mutually beneficial, this transaction, for both parties," Tilray Chief Financial Officer Mark Castaneda said in an interview.
Tilray has signed numerous partnerships, including with brewing giant Anheuser-Busch InBev, retail and consumer brands conglomerate Authentic Brands Group and pharmaceutical company Novartis. Some of its competitors have taken large investments from strategic investors. Alcohol company Constellation Brands purchased a 38% stake in Canopy Growth last year, while tobacco giant Altria bought 45% of Cronos.
"Tilray and the cannabis industry is disrupting many industries, and there is a lot of long-term interest from really all those industries — pharmaceutical, alcohol, (consumer packaged goods) and tobacco — of investing into this space on a long-term basis," Castaneda said. He said he does not expect all 75 million shares to be sold.
WATCH: How the FDA may regulate CBD
Correction: This story was revised to correct that Privateer's current stake will be offered to the market over the next two years in what is expected to be a tax-free deal for its investors.