- Tilray Brands (TLRY, Financial) receives stockholder approval for a reverse stock split, ranging from 1-to-10 to 1-to-20.
- The company reduced its debt by $76 million in Q4 FY2025.
- Tilray's financial stability is underpinned by $250 million in cash and marketable securities.
Tilray Brands, Inc. (TLRY) announced the approval of a reverse stock split by its stockholders, with a proposed ratio between 1-to-10 and 1-to-20. Despite receiving the green light, the company has decided to temporarily pause its implementation as it assesses optimal timing and stock price conditions. The strategic move is designed to secure compliance with Nasdaq listing requirements, align shares with peer companies, attract more institutional investors, and potentially save up to $1 million in annual meeting costs.
The decision comes amidst positive financial developments for Tilray. In the fourth quarter of FY2025, the company managed to reduce its total debt by approximately $76 million. This achievement brought its net debt to trailing twelve-month Adjusted EBITDA ratio to less than 1.0x, indicating a robust leverage position. Additionally, Tilray maintains a strong financial footing with approximately $250 million in cash and marketable securities, positioning it well for strategic opportunities and potential acquisitions.
While reverse stock splits are typically seen as technical adjustments that don't alter the intrinsic value of a company, they can impact market perception and trading dynamics. By securing stockholders' approval but delaying execution, Tilray's management retains flexibility to monitor stock performance and market conditions before proceeding.
