The Canadian licensed producer, HEXO Corp. (NYSE: HEXO) has been hit hard over the past year, as the overall cannabis industry hits the reset button. Over the past year, the cannabis company has seen striking losses over 75%. Shares are not off to a great start in 2020 either, as HEXO Corp. is already down 20.13% through January 29th.
Since its initial public offering (IPO) on the NYSE in May 2019, HEXO Corp. has dropped from $7.93 all the way to its current price of $1.27, as of January 29th. In order to remain in compliance, HEXO Corp. began trading on the NYSE American exchange on January 23, 2020.
HEXO Corp.: Bad News Has Been Steady
While the overall cannabis market sell-off plays a big role in HEXO Corp.’s woes, the company has been at the center of a few pieces of bad news. In November 2018, HEXO came forward and announced that it grew cannabis in an unlicensed room at its Niagara, Ontario cultivation facility.
On January 27, 2020, news broke that fellow Canadian licensed producer, MediPharm Labs Corporation (TSX: LABS) (OTCQX: MEDIF), had filed a lawsuit against HEXO related to a non-payment of $7.5 million (C$9.8 million). The payment is allegedly tied to a signed agreement last year for MediPharm Labs to ship and supply HEXO with cannabis resin.
According to MediPharm Labs, HEXO stopped making payments in October 2019 and has failed to make its agreed payments for November, December, and January. The following day after news of the suit broke, MKM analysts downgraded HEXO to a “neutral” from a previous “buy.”
HEXO: 5 Largest Institutional Shareholders
There are some interesting inclusions on the top five list of HEXO Corp.’s largest institutional shareholder list. Here are the top five institutional shareholders, as of December 31, 2019:
- ETF Managers Group, LLC – 4.16% Ownership
The ETF Managers Group, LLC (ETFMG) was founded in 2014 and focuses on developing ETFs with innovation in mind. The asset management company maintains a diverse offering of ETFs, including the cannabis fund, ETFMG Alternative Harvest ETF (NYSE: MJ).
ETFMG holds 4.16% of HEXO Corp.’s total shares. This position accounts for 1.44% of ETFMG’s total assets. Over the past several quarters, ETFMG has been adding to its position and holds a total of 10.11 million shares, as of December 31, 2019.
- Millennium Management, LLC – 0.66%
Founded in 1989, Millennium Management, LLC operates as a global investment management firm. As of January 1, 2020, the firm manages $38.58 billion in assets.
Millennium owns 0.66% of HEXO’s total shares. However, this position equates to a mere 0.01% of its total assets under management. Over the past eight months, Millennium has seen some buying and selling. Ultimately, the investment management firm’s HEXO position has slightly grown over the past several quarters to reach 1.59 million shares.
- Bank of Montreal (NYSE: BMO) – 0.64%
The Bank of Montreal (BMO) is engaged as a diversified financial services company, which primarily operates in North America. BMO was founded in 1817 and is based out of Montreal, Canada.
BMO holds a 0.64% stake in HEXO Corp., which also equates to a mere 0.01% of the firm’s total assets. Over the past several quarters, BMO has been steadily buying up shares and increasing its position to 1.56 million shares.
- Bank of America Corporation (NYSE: BAC) – 0.47%
Bank of America Corporation offers a diverse range of banking and financial products & services to individuals, businesses of all sizes, governments, and more. The bank maintains a service list of 66 million consumer and business clients, as of July 2019.
As of the end of 2019, Bank of America held a position equating to 0.47% of the Canadian cannabis company’s total shares. This position is so small compared to Bank of America’s total holdings that it equates to 0.00%. Over the past several quarter, the bank has increased its position to 1.15 million shares.
- Barclays PLC (NYSE: BCS) – 0.33%
Barclays is a London, U.K.-based financial services & products company. The global bank was founded in 1690 and continues to serve markets across Europe, Americas, Asia, Africa, and the Middle East.
The U.K.-based bank maintains a position equating to 0.33% of HEXO’s total shares. However, the position is so small, that is makes up 0.00% of total assets held by Barclays. Over the past several quarters, Barclays has not made any changes to its share total of 811,346 shares.
Disclaimer: Matt Rego and Spotlight Growth have no long or short positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.