Aphria Defends Latin American Operations
Aphria is standing by its Latin American operations after its shares were hammered following a short sellers' report that raised questions about the company's acquisitions in the region.
Company CEO Vic Neufeld says the acquisition of licenses and other assets and related businesses in Colombia, Argentina and Jamaica and a right of first offer and refusal in respect of Brazil were an important strategic deal.
In a statement released Tuesday, he said "the company has made considerable progress supporting and building out its operations on the ground in Latin America and the Caribbean since the deal closed in September."
Shares in Aphria fell nearly 28% in trading Monday after short sellers called the Leamington-based marijuana producer a ``black hole'' and alleged that its recent international acquisitions totalling roughly $280-million were ``largely worthless.''
Quintessential Capital Management and Hindenburg Reasearch, which are short on Aphria, alleged the company acquired foreign companies in countries including Jamaica, Argentina and Colombia at ``vastly inflated'' prices and in ways that it believes benefit a group of insiders.
Aphria, one of the largest Canadian cannabis companies by market capitalization, has called the short-sellers' allegations ``false and defamatory.''
By selling shares short, an investor makes money when the price of a company's shares fall.