IPO Watch: Cronos Australia closes down 32pc on ASX debut
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Shares in the ASX’s newest pot stock, Cronos Australia (ASX:CAU), closed down 32 per cent on their debut on the ASX today.
Cronos successfully raised $20m in its IPO selling shares at 50c a pop, but they opened at 35.5c, and closed down lower.
Cronos would have been hoping to continue the recent trend of ASX debutants flying on debut — 17 of the most recent 20 companies to join the ASX have seen their share prices rise, with one stock, Osteopore (ASX:OSX), up as much as 330 per cent.
But that hasn’t been the case, with CAU shares only reaching as high as 42c so far. CEO Rodney Cocks told Stockhead the company was not too fazed by the dip.
“Of course we would have liked to see a more positive start to trading, but the important thing is that we’re now listed,” he said.
“We have only just begun. We can concentrate on executing on our asset light strategy and developing our company into one of the leading medicinal cannabis firms in Australia and the Asia Pacific Region.
“The quality of a business does not depend on the company’s share price during one day’s trading. It’s the longer-term results that matter, and we think our strategy, board and management puts us in an excellent position for the long term.
“Our aim is to deliver sustainable value for shareholders over time, with premium cannabinoid products, a market leading strategy and a leading board and management.”
Cocks yesterday said Cronos Aus — a 50-50 joint venture between $4.5 billion NASDAQ and Toronto Stock Exchange-listed cannabis company Cronos Group and NewSouthern Capital, a private equity firm controlled by Cocks and fellow Cronos Aus director (and chief operating officer) Peter Righetti — wanted to deliver shareholder returns sooner rather than later.
“We will not be investing shareholder funds in capital-intensive processes like cultivation, manufacturing, drug development and so on,” he told Stockhead.
“We will be partnering with broader tier one players for our needs, and be focused on delivering shareholder value through our branded product strategy.”