Tilray Shares Plunge Following Reverse Stock Split

Tilray US88688T1007

Tilray Brands, Inc. saw its stock price tumble significantly in trading, as a previously announced 1-for-10 reverse stock split took effect. Despite the technical increase in nominal share price resulting from the consolidation, the market valuation suffered an approximate 15% loss. Trading around $7.71, the reaction underscores investor dissatisfaction with the corporate action.

The reverse split was implemented after market close on December 1 at 22:01 CET, with trading on a split-adjusted basis commencing the following session. The mechanics of the move consolidated every ten existing shares into a single new share, reducing the outstanding share count from roughly 1.16 billion to approximately 116 million.

Prior to the split, Tilray shares traded at $0.91. A straightforward adjustment would have suggested an opening price near $9.10. The reality diverged sharply, with the stock opening and trading in the $7.70 to $7.80 range—representing an immediate de facto loss exceeding 15% from the adjusted reference point.

This negative response is typical, as reverse splits are frequently interpreted by the market as a measure of last resort to maintain exchange listing requirements or artificially inflate a share price. While Tilray stated the aim was to align its capital structure with industry peers and attract institutional investors, the prevailing "sell the news" dynamic took hold.

Strategic Expansion into Panama Provides a Counter-Narrative

Amid the market turbulence, Tilray announced a strategic foray into Latin America. Its medical cannabis division, Tilray Medical, has established a joint venture with Top Tech Global Inc. to enter the Panamanian market.

The newly formed entity, Solana Life Group, has secured a license for medical cannabis in Panama. This license permits the cultivation, manufacturing, and distribution of medical cannabis products within the country.

The immediate revenue impact is likely to be modest relative to Tilray's core operations in North America and Germany. However, the move signals a continued commitment to the company's "land and expand" international strategy, even as its share price experiences volatility.

Underlying Sector Skepticism Remains

The steep decline following the reverse split highlights persistent skepticism surrounding the broader cannabis sector. Although the nominal share price now resides in the $7 range, Tilray's market capitalization effectively contracted during the transition.

The company's most recent Q1 report for fiscal year 2026 showed net revenue of $210 million and a modest net income of $1.5 million. While returning to profitability marks a milestone, market participants remain doubtful about sustainable earnings growth without further shareholder dilution through equity issuance.

Technical traders are now monitoring the $7.50 level closely. A sustained break below this support could trigger additional downward momentum toward the $6.50 area. The upcoming Q2 results, due in January 2026, will be a key test of whether operational improvements can outweigh the negative sentiment generated by the restructuring.