Cronos Group Inc (NASDAQ: CRON) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that tobacco giant, Altria, has agreed to make a large investment. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The investment made by Altria;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
CRON Gains On Altria Investment
As mentioned above, Cronos is having an incredibly strong start to the trading session this morning after announcing that Altria has agreed to make an investment. According to the announcement by the comapny, Altria has agreed to make a $1.8 billion equity investment in the company to help it expand and innovate.
As part of the agreement, Altria will receive warrants that, if fully exercised, would grant the company the ability to buy an additional C$1.4 billion in CRON shares. At the moment, Altria has a 45% stake in the company. However, if all of the warrants were exercised, the tobacco giant would own approximately 55% of the company, making it the majority shareholders. In a statement, CRON, had the following to offer:
This strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities, and deep regulatory expertise to better position the Company to compete, scale and lead the rapidly growing global cannabis industry.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of CRON, the news proved to be overwhelmingly positive. After all, this investment comes with a couple of great things. First and foremost, it will give the company massive amounts of money that will help it through the expansion and innovation process. Moreover, Altria has extensive regulatory, sales and operational expertise when it comes to regulated products. After all, it is one of the largest cigarette manufacturers in the world. With this in mind, it’s not surprising to see that the stock is making a run for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:59), CRON is trading at $13.85 per share after a gain of $3.40 per share or 32.54% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CRON. In particular, we’re interested in following the story surrounding the Altria investment and whether or not the company excersizes the warrants that will make it the majority shareholder. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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