Aphria Inc (TSE: APHA) shares saw a remarkable comeback today as shares jumped over 50 percent in a single trading session.
Ever since known short sellers in Quintessential Capital Management (QCM) and Hindenburg Research – a forensic analysis firm – announced their report calling the companies acquisitions of Latin American and Caribbean assets to be “worthless” and a scheme to defraud shareholders, Aphria shares have tumbled drastically. The ongoing conflict between the two parties continues as Aphria appointed a special committee to review the claims made by QCM.
A special committee and independent directors have been appointed to review the firm’s various acquisitions in Latin America and the Caribbean. The firm remains optimistic, fighting back against what they call “inaccurate and misleading accusations” by short sellers, according to CBC News.
At the same time, Brady Cobb, head of SOL Global Investments Corp – which was accused of being a “sister” company to Aphria that was involved in this entire affair – went on BNNBloomberg to say that the short sellers failed to do their due diligence. “If you look at Jamaica and Marigold Enterprises, they said they went to look for the farm, they didn’t look for the farm. If they wanted to call the farm, they could have called us or called Aphria and asked for a tour,” Cobb said.
Aphria’s CEO Vic Neufeld went on to add that the company had plans to provide a “complete rebuttal” to the claims of QCM and Hindenburg next week. He dismissed claims that the company was merely flipping operations that are worth very little, a process that QCM argues funneled hundreds of millions of dollars away from shareholders and into the pockets of the insiders present in all of these companies.
At the same time, Hindenburg Research made another statement this afternoon, doubling down on previous accusations. “Our examination of Aphria led to another Aphria-backed company, Liberty Health Sciences, where we uncovered multiple irregularities that raise more questions around believed undisclosed insider self-dealing,” said the firm according to their article published on Seeking Alpha called “We Believe This Rot Runs Deep.” They went on to add that certain individuals bought 242 million shares of Liberty at a $0.001 private placement just days after Aphria announced that it was purchasing those very same shares at 208 times the price.
Andy DeFrancesco, a figure that QCM/Hindenburg has cited as being central to the supposed scheme, also has ties to Liberty Health Sciences as having founded the legal entity that morphed into the company down the road. Liberty also paid C$13.5 million for real estate that owned by a private, DeFrancesco-owned entity.
As both sides continue to bring more information to bear, only time will tell whether these accusations will be confirmed by independent regulatory investigations.
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 ten countries across five continents. – Aphria