Aurora shares hit 52-week low as Battley’s chicken tweet fires up critics
Three days after stepping down from his high-profile executive role at Aurora Cannabis (ACB.TO)(ACB), one of Canada’s largest pot producers, Cam Battley tweeted about General Tso’s chicken. However, most of the people who replied took the tweet as an opportunity to confront Battley about Aurora’s stumbling stock.
I don’t know enough about General Tso (alternatively General Tao), but clearly the man knew his chicken. And he apparently outranked Colonel Sanders. ;)
— Cam Battley (@CamBattley) December 24, 2019
The Edmonton-based company is facing mounting pressure from investors concerned about a litany of red flags that emerged in recent months, ranging from missed revenue guidance, to insider selling, to a sell-side report with a $0 price target, to the company’s tight cash position.
Aurora’s stock has slid more than 80 per cent from its post-recreational legalization high in March. U.S.-listed shares hit a new 52-week low on Tuesday, dropping to $1.88 in early trading.
“I’ll be happier when our share price is higher,” Battley joked in an interview with Yahoo Finance Canada following Aurora’s latest quarterly results.
Battley joined Aurora in 2016 and became chief corporate officer in 2018, where he was the public face of Aurora, and an enthusiastic booster for the cannabis sector at large. His abrupt departure was announced by the company on Dec. 21, the Saturday before the Christmas holidays. The press release said the decision was effective as of Dec. 20. It did not specify why Battley “stepped down.”
Aurora CEO Terry Booth said in the statement Battley will move on to “tackle Australia” through a role on medical producer MedReleaf Australia’s board, which Battley accepted in November. Aurora owns a 10 per cent stake in MedReleaf Australia, and has 50 per cent voting rights in the privately-held company.
Aurora has not named a replacement to fill Battley’s now-vacant job.
“We believe it is easy to make the case that Battley is ‘jumping ship’ with potential further bad news on the way,” Jefferies analyst Owen Bennett wrote in a research note following the announcement. “The biggest issue though, for us . . . is trust, with multiple instances of Aurora missing targets or going against its word.”
Aurora shares tumbled in September after the company fell short of its own revenue guidance, a mistake Battley said “shouldn’t have happened.” The company promised profitability in 2019, before pushing that to fiscal 2020. It also praised the progress at two of its partially built facilities shortly before halting construction in a bid to conserve cash in November.
“It is clear to us that the market is lacking conviction in Aurora,” Bennett added.
Battley often shared the cannabis spotlight with Bruce Linton, the charismatic co-CEO of Canopy Growth (WEED.TO)(CGC) ousted from his job last July amid lacklustre financial performance at the Smith Falls, Ont.-based company. Unlike Linton, Battley is an avid Twitter user. He regularly engages with Aurora’s fans and critics in between tweets about the company milestones, trail running and travel.
“Angry replies and menacing comments replaced the relatively pleasant interactions that had existed just a few months earlier,” Andrew Udell of the cannabis sector research group TheCannalysts wrote in a recent analysis piece. “Many emotions out there right now are pretty raw.”
Battley’s tweet about General Tso outranking KFC’s Colonel Sanders elicited a mix of insults and well wishes.There was even speculation that his words referred to more than chicken.
One Twitter user wondered if he was suggesting the Chinese market for CBD will eclipse the market in the United States. It’s an intriguing notion, given MedReleaf Australia’s geographical proximity to the massive country known for its hemp production.
Yahoo Finance Canada reached out to Battley for comment, but did not receive a response in time for publication.
TheCannalysts have been vocal critics of Aurora, and by extension Battley. In October, Udell’s colleague Craig Wiggins raised questions about potentially inflated sales figures through a wholesale transaction. An Aurora spokesperson did not directly respond to questions asked by Yahoo Finance Canada in reference to Wiggins’ research.
Battley, for his part, called Wiggins a “respected observer of the sector.”
With confidence in legal cannabis producers dwindling along with share prices, and two of the most visible actors no longer in their respective C-suites, Udell sees Battley’s departure as a loss for the sector.
“The business side of the cannabis industry needs more Cams,” he wrote. “Articulate, passionate people like Cam will genuinely be missed.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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