What occurred

Shares of Sundial Growers (SNDL -23.84%) have been sinking 15.3% as of 11:29 a.m. ET on Tuesday. A fast look at a chart for the hashish inventory, although, would possibly lead you to imagine in any other case. Sundial’s share value opened practically 833% increased on Tuesday than its Monday closing value.   

Nonetheless, this seemingly large bounce was fully the results of a 10-for-1 reverse inventory break up. Sundial’s shareholders overwhelmingly authorised the share consolidation at a particular assembly held on Monday. The corporate’s board of administrators instantly initiated the reverse inventory break up following the conclusion of the shareholder assembly.

Immediately’s decline (on an adjusted foundation factoring within the reverse inventory break up) seems to replicate lingering uncertainty about Sundial’s near-term prospects. 

So what

Sundial’s reverse inventory break up was wanted for the corporate to proceed itemizing its shares on the Nasdaq (NDAQ 0.59%) inventory change. Nasdaq requires the bid value for shares to shut at or above $1 for 10 consecutive buying and selling days. The inventory change notified Sundial on Aug. 9, 2021 that it was not in compliance with this requirement.

The Canadian hashish operator initially wanted to regain compliance by Feb. 7, 2022. Nonetheless, Nasdaq granted Sundial an extension of 180 days. The brand new deadline for regaining compliance with the minimal bid value requirement of Aug. 8, 2022 was developing quickly.

Sundial has prevented delisting by conducting its 10-for-1 reverse inventory break up. Nonetheless, the underlying the explanation why its inventory has been crushed down a lot, together with headwinds within the Canadian hashish market, have not been resolved.

Now what

There’s additionally one other change ensuing from the particular shareholders assembly. Sundial is altering its company identify to SNDL Inc. The corporate plans to supply extra particulars about its rebranding efforts in its second-quarter replace in early August.