Grizzle Ask If Aurora Is Heading Towards Its Apocolypse Now Moment

Grizzle Ask If Aurora Is Heading Towards Its Apocolypse Now Moment

Here’s an excerpt from their piece.   Read the full article at  https://grizzle.com/aurora-cannabis-technical-bankruptcy/?tl_inbound=1&tl_target_all=1&tl_period_type=3&ck_subscriber_id=489163782 The most likely writedown will come from Aurora’s goodwill and intangible assets. These assets were created when valuations across the space were frothy to say the least. With stock prices cut in half and greenhouses selling for pennies on the dollar, we don’t see any way Aurora can convince their auditors to let these values stand. Aurora has C$3.9 billion of goodwill and intangibles, a full 70% of the total book value of the company. A writedown any larger than C$1.9 billion would cause Aurora to violate their covenants, Aurora is likely in a heated debate with their auditors as we speak to avoid a writedown of this size. With cannabis stocks as a whole down 50% and Aurora down more than 60% in the last year, we think its highly likely writedowns could exceed C$2 billion. Other’s share our view, with a Bloomberg article quoting an analyst who expects a writedown close to C$2 billion. SIZE OF THE WRITEDOWN REQUIRED TO CREATE A TECHNICAL DEFAULT Source: SEDAR, Grizzle Estimates HOW WILL THIS ALL PLAY OUT? Our best guess for how the timeline plays out looks like this: Aurora…

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Source : CANNANNEW REPORT
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