What Happened?
Shares of cannabis company Tilray Brands (NASDAQ:TLRY) fell 16.4% in the after-market session after the company announced it would implement a 1-for-10 reverse stock split. A reverse stock split combines multiple shares into one, which increases the price per share without changing the company's total value. Although management noted the move was intended to make the company more attractive to institutional investors and cut up to $1 million in yearly administrative costs, investors reacted negatively. Such actions can be viewed by the market as an effort to keep a stock's price above an exchange's minimum listing requirements. The significant drop in the stock's price reflected these concerns. Also contributing to the market reaction was the news that the company announced it would implement a 1-for-10 reverse stock split. A reverse stock split combines multiple shares into one, which increases the price per share without changing the company's total value. Although management noted the move was intended to make the company more attractive to institutional investors and cut up to $1 million in yearly administrative costs, investors reacted negatively. Such actions can be viewed by the market as an effort to keep a stock's price above an exchange's minimum listing requirements. The significant drop in the stock's price reflected these concerns.
The shares closed the day at $0.81, down 21.7% from previous close.
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What Is The Market Telling Us
Tilray’s shares are extremely volatile and have had 86 moves greater than 5% over the last year. But moves this big are rare even for Tilray and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 1.8% on the news that the U.S. government passed a spending bill that included provisions to re-criminalize certain hemp-derived THC products. The last-minute provision effectively targeted intoxicating hemp products, such as Delta-8, that had been legalized under the 2018 Farm Bill. This development was viewed as a setback for Canadian cannabis companies like Tilray, which had considered the hemp-derived product segment a key pathway into the lucrative U.S. market. In response to the legislative change, Tilray stated that it expected “no material revenue impact” from the ban.
Tilray is down 43.9% since the beginning of the year, and at $0.82 per share, it is trading 61% below its 52-week high of $2.10 from October 2025.
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