Major Curaleaf Holdings (CSE: CURA) shareholders have agreed to extended lockups as of this morning, effectively reducing the potential scale of shares that are free trading for the company. The new extended lockup applies to all shareholders of both Curaleaf and Cura Partners, who operates as Select, whom currently hold more than 1% of the company.
The new extended lockup will see revised unlock periods for major shareholders of the company. Whereas the previous lockup agreement allowed for a 15% release of locked shares per quarter, the new agreement stipulates that only 5% of the total locked up shares will be released each quarter, significantly reducing potential free trading shares. The first release is expected to occur March 31, 2020.
The extended lock up applies to approximately 62% of Curaleaf’s currently outstanding shares, or 326.7 million common shares.
While the news is expected to viewed as being bullish in the near term for current shareholders, the result of the lockup is that it simply delays any pricing pressure the equity might experience as a result of shares unlocking. The company has confirmed that up to 71% of the companys shareholders has expressed no intent to sell despite partial unlocks already occurring on their holdings. The result, is that it begs the question on why the lockup needs to exist at all.
A date for the final unlocking of all shares was not provided by the firm.
Curaleaf Holdings last traded at $8.97 on the CSE.
Information for this briefing was found via Curaleaf Holdings. The author has no securities or affiliations related to the discussed organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.