The news of a company saving costs is almost always welcomed by investors and hence, it was perhaps no surprise that the cannabis stock Hexo Corp (NASDAQ:HEXO) surged by 8% yesterday.
The company was in the news yesterday after it announced that it was going to cut as many as 180 jobs and thereby end up saving as much as $15 million a year. The announcement came as a source of significant optimism among investors and it is understandable, considering the fact that cannabis firms like Hexo routinely lose money due to high costs.
Trading Data
On Wednesday, HEXO stock moved up 8.41% to $0.70 with 10.52 million shares, compared to its average volume of 9.73 million shares. The stock moved within a range of $0.6600 – 0.7179 after opening trade at $0.6517.
Hexo slashing 180 jobs to save $15M annually
In this regard, it should be noted that the announcement was not a knee jerk step but instead the part of a specific strategy to cut cost. Hexo provided significant details with regard to its cost saving plans by way of which it seeks to cut down administrative, general and selling expenses by as much as 30% by the end of the fiscal year of 2023.
While the stock surged following the news, it is going to be interesting to see if the momentum is maintained over the course of the coming days or not. It may be a good time to keep an eye on the Hexo stock.
Key Quote
“We are working with all impacted employees to the best of our ability to ensure that they are treated fairly and provided the support necessary to assist with this transition. I would like to thank all impacted employees for their contributions and dedication to Hexo.”
Technical Data
HEXO stock is below the 50-Day and 200-Day Moving averages of $0.74 and $2.99 respectively. However, the stock is trading above the 20-Day moving average of $0.63.
