Tilray Shares Plunge Amid Reverse Stock Split Announcement

Tilray US88688T1007

Tilray's stock experienced a significant downturn Friday, plummeting approximately 21% to close around $0.81 per share. The dramatic sell-off occurred as the cannabis company confirmed concrete plans for a share consolidation set to begin in December 2025.

Market participants reacted negatively to the finalized reverse stock split arrangement, creating substantial downward pressure on the equity. The company's announcement detailing a 1:10 consolidation ratio prompted widespread investor retreat despite management's strategic rationale.

The technical adjustment becomes effective after market close on Monday, December 1, 2025. Beginning Tuesday, December 2, 2025, Tilray shares will trade on a split-adjusted basis. This corporate action will mathematically increase the share price while proportionally reducing the number of outstanding shares held by investors.

Key Details of the Consolidation Plan

• Consolidation Ratio: 1:10 (transforming ten existing shares into one new share)
• Outstanding Shares: Reduction from approximately 1.16 billion to about 116 million
• Trading Commencement: Tuesday, December 2, 2025
• Strategic Rationale: Targeting annual cost savings up to $1 million while appealing to institutional investors

Company leadership aims to attract institutional capital that typically avoids penny stock investments through this share structure modification.

Trading Activity Reaches Fever Pitch

The substantial decline coincided with extraordinary trading volume, which surged to approximately 98.4 million shares—nearly double the stock's average daily trading activity.

Following the sharp decline, Tilray's market capitalization now stands at approximately $925 million. The sell-off has expanded year-to-date losses for 2025 to nearly 44%. Current share prices reflect a decline of roughly 61% from October's 52-week high of $2.10.

Market Anticipates Post-Split Positioning

Financial markets are currently pricing in the potential friction losses associated with reverse stock splits. While corporate management anticipates benefits including cost reductions and a more appealing share price for institutional portfolios, short-term sentiment remains decidedly negative.

Fractional shareholdings will be settled in cash—a procedural element that often generates additional selling pressure from retail investment accounts. The technical recalibration scheduled for December 2 will establish a new price baseline, with shares expected to open around $8 based on current closing values.