Shareholders in Stem Holdings (OTCMKTS:STMH) had a tough time in the markets on Friday as the stock tanked by as much as 17% following a major announcement from the company. In light of such a decline, it might be the right move for investors to take a closer look at the announcement and then make their minds up one way or another about the stock.
Trading Data
On Friday, STMH stock lowered by 17.13% to $0.0891 with more than 493k shares, compared to its average volume of 443K shares. The stock has moved within a range of $0.0890 – 0.1125 after opening trade at $0.1063.
Stem Holdings divests its delivery and e-commerce cannabis business
The company announced on Friday that it was going to disinvest from Driven Deliveries, its fully owned subsidiary company. The company noted that the company was going to be returned to the founders and the transaction was going to be completed in exchange for shares in Stem Holdings.
In order to complete this transaction, as many as 12.5 million shares in Stem Holdings are going to be sent to the treasury. In addition to that, it is also going to lead to cutting the total liabilities in the company’s books by as much as $7.1 million. On the other hand, the move will also boost the working capital available with Stem Holdings by as much as $4.1 million. However, it seems that the decision to disinvest did not impress investors.
Technical Data
STMH stock is below the 20-Day and 50-Day Moving averages of $0.1231 and $0.1774 respectively. Moreover, the stock is below the 200-Day moving average of $0.3627.
