Why Tilray Stock Dived by 10% This Week

Core Viewpoint - The sentiment around Tilray Brands has been negatively impacted by a financial engineering move and a price target cut from an analyst, reflecting the struggles within the marijuana industry [1]. Group 1: Stock Performance - Tilray's stock experienced a decline of almost 10% over the past week [2]. - The company executed a reverse stock split at a ratio of 1-for-10, which was announced more than seven months prior [3]. - Investors generally react negatively to reverse stock splits, as they are often implemented to meet stock exchange minimum share price requirements [4]. Group 2: Analyst Insights - TD Cowen's Robert Moskow reduced his price target for Tilray from $25 to $10, adjusting for the stock split, while maintaining a buy recommendation [5]. - The price target cut is attributed to increased competition in Canada, where Tilray operates, and challenges in the craft beer segment [5]. Group 3: Market Context - Tilray's current market capitalization stands at $8 billion, with a current stock price of $7.35 [7]. - The company's gross margin is reported at 20.17%, and it has no dividend yield [7]. - The overall consumption of alcoholic beverages in the U.S. has declined to levels not seen in decades, posing additional challenges for Tilray's diversification into specialty beer [7].