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Tilray Brands Inc (NASDAQ:TLRY)'s chief financial officer (CFO), Carl Merton recently took to Reddit in an Ask-Me-Anything (AMA) session, aiming to directly engage with shareholders and industry enthusiasts.
The move comes as Tilray faces questions about the cannabis market's volatility and its impact on the company's stock price.
During the AMA session, Merton, operating under the username "TilrayIR," addressed inquiries about Tilray's path to profitability and cost reduction strategies amidst various acquisitions.
Notably, Merton clarified that the recent refinancing deal was primarily focused on securing lower interest rates and bolstering the balance sheet, rather than covering previous losses, reported Green Market Report.
Merton also emphasized Tilray's commitment to strengthening the balance sheet and cash position by repaying debt and reinvesting in the company to drive global expansion. "We believe cash is king, and we remain focused on strengthening our balance sheet as well as our cash position by paying down a portion of debt and reinvesting in Tilray to further grow our global businesses," he stated.
Merton highlighted that Tilray's stock price fails to reflect the true value of its diverse portfolio. Notable achievements included the successful restructuring of Aphria Inc. (NASDAQ:APHA), expansion into multiple countries, and the company's ventures in the U.S. alcoholic beverage sector.
Additionally, Merton underscored Tilray's positive financial performance, with the company reporting 16 consecutive quarters of positive adjusted EBITDA—a feat unmatched among public cannabis companies under the leadership of CEO Irwin Simon.
He also emphasized the focus on optimizing operations, reducing costs, driving revenue, and generating free cash flow. Since the Aphria-Tilray merger, the company has already reduced costs by $122 million, with further cost reductions of $16 million planned, he said.
During the session, Merton directly addressed concerns raised by participants. He clarified that recent actions were not part of a plan for a reverse stock split and dismissed claims that the refinancing deal and convertible note offer benefited short sellers, affirming that no shares were provided to cover their existing positions.
Merton also addressed executive compensation, emphasizing that CEO Simon does not receive exorbitant annual base salaries of $20 million or $30 million. Instead, the majority of Simon's and other top executives' compensation is tied to performance-based equity incentives.
Clearing the Air but Some Skepticism Remains: Merton concluded the AMA session with the hope that addressing questions and recurring themes would provide reassurance to investors and observers. However, despite his efforts, some participants and observers remained skeptical, seeking further clarity and pointing out potential discrepancies.
Transparent communication is key to earning trust and alleviating concerns in the midst of a challenging and evolving cannabis market.
Price action: On Thursday afternoon, TLRY shares were $1.665 per share, trading at 3.76% down.
Photo: Courtesy Of Wance Paleri On Unsplash
