Aphria Inc. (TSX:APHA) stock rose 8.9% on December 11. Shares have shot up 36% week-over-week, recouping some of its losses in the immediate aftermath of a crippling short-seller report.
Aphria leadership moved quickly to rebuke the short-seller and reaffirmed its faith in its screening processes. Analysts at Bank of Montreal and Scotiabank have given Aphria a vote of confidence since the report, pointing to similar international acquisitions made by Canopy Growth and Aurora Cannabis.
However, Aphria appointed a special committee last week to review the acquisitions and undertake a more thorough analysis.
A Globe and Mail report released late last night said that Aphria and its long-time law firm Stikeman Elliott LLP are set to cut ties. Stikeman lawyers advised Aphria on its acquisitions in Jamaica, Columbia, and Argentina.
Aphria CEO Vic Neufeld said that Stikeman was still Aphria’s council "as of today" while the firm itself declined to comment.
These new developments are worth monitoring for investors. Aphria’s appointment of a special committee and the deterioration of its relationship with Stikeman Elliott LLP are not encouraging.
However, trading in the aftermath of the short-seller’s report shows that markets are not convinced of Aphria’s imminent downfall. The company possesses extensive domestic operations and is poised to reach 255,000 kilograms of production annually by the middle of 2019.
Aphria still has work to do to ease the minds of shareholders. Investors will eagerly await the findings of its special committee.
