Aphria Shares Tumble as Short Sellers Respond to Press Releases

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Yesterday was a dramatic day for Aphria (NYSE: APHA), which saw it’s share price decline almost 30 percent. Known short seller Gabriel Grego, head of Quintessential Capital Management (QCM), released a joint report compiled by Hindenburg Research which accused Aphria executives of funneling shareholder money into questionable South American and Caribbean companies.

Despite multiple press releases from Aphria countering these claims, responses from QCM and Hindenburg have sent share prices tumbling another 21 percent.



According to PR Newswire, Aphria released a statement in which it detailed its existing South American and Caribbean operations. The press release went on to say that the company was committed to transparency, and that the “LATAM acquisition was a transaction negotiated at arms’ length between two publicly traded companies each of which retained professional financial advisors (one of which provided a formal valuation of the acquired assets).” It went on to insist that SOL Global Investments/Scythian Biosciences was not a “sister” company to Aphria.

Vic Neufeld, Aphria’s CEO, said that “Yesterday, I, along with other members of our Executive Management team, stepped up to demonstrate our confidence in the Company’s business plan, growth strategy, integrity and value of the assets by personally investing more than $3.1 million in Aphria’s common shares.”

Both QCM and Hindenburg Research responded to this announcement. The former issued a statement which went on to say that, in light of Aphria’s recent response, the firm felt “even more confident” in their original conclusion (calling the company a “black hole” for shareholders and is effectively worthless). “Aphria has merely repackaged the main contents of its past public statements, whilst conveniently avoiding addressing almost all of our very serious core allegations,” the company added.

Hindenburg Research would reiterate the same point as QCM, saying that Aphria’s response was largely a rehash of earlier press releases and company reports, clinging to existing valuations while refusing to dispute the short sellers core concerns.

The chief among these concerns include questions regarding the relationship between Aphria and SOL, and the presence of cross-over executives serving in both companies. Additionally, QCM called out Aphria to release transaction records in full form, without any redactions, since most of the firms LATAM transactions were using projected revenue figures that were redacted and difficult to validate.

Other concerns include why many shell companies owned by Aphria advisor and SOL chairman Andy DeFrancesco changed names immediately before being resold, as well as why some of these shell companies registered addresses lead to derelict buildings.

In response, Aphria shares tumbled an additional 21 percent in todays trading session as markets are doubting the legitimacy of some of the company’s operations.

Aphria Inc Company Profile

Aphria is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible.

Focusing on untapped opportunities and backed by the latest technologies, Aphria is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment.



Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than 10 countries across 5 continents. – Aphria