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Ascend Wellness Holdings, Inc. (OTC:AAWH) recently disclosed a significant stock sale by Millstreet Capital Management LLC, a major stakeholder in the company. On November 15, Millstreet Capital sold 325,000 shares of Ascend Wellness's Class A Common Stock at an average price of $0.4463 per share, totaling approximately $145,047. Following this transaction, Millstreet Capital holds 21,428,969 shares indirectly. The sale was executed by Millstreet Capital, with Craig Kelleher and Brian Connolly, both managing members, involved in the transaction. According to the filing, the shares are held for the accounts of Millstreet's private investment funds and accounts.
In other recent news, Ascend Wellness Holdings (AWH) has been making strategic moves to bolster its financial performance. The company's recent earnings call revealed a plan to cut costs by $30 million by 2025, aiming to optimize assets and enhance profitability. The third-quarter financial report showed a steady retail revenue of $94 million, with a slight increase in net revenue to $141.6 million year-over-year.
AWH is also expanding its product line, launching an edibles brand named Effin', and focusing on vertical integration, which currently stands at a 52% penetration rate for in-house products. In addition, the company has plans to open 20 new dispensaries across key states, despite facing competitive pressures in the cannabis industry.
Despite these strategic initiatives, AWH anticipates flat or slightly declining revenue and adjusted EBITDA in Q4 due to competition and pricing pressures. A significant lawsuit regarding cannabis rescheduling set for a hearing could impact historical tax obligations. However, the company maintains an optimistic outlook, expecting a compound annual revenue growth rate of over 10%.
InvestingPro Insights
The recent stock sale by Millstreet Capital Management LLC comes amid challenging times for Ascend Wellness Holdings, Inc. (OTC:AAWH). According to InvestingPro data, the company's stock has experienced significant declines across various timeframes. Most notably, AAWH's share price has fallen by 41.87% in the past month and 58.11% over the last three months, reflecting a broader downward trend in the cannabis sector.
Despite these headwinds, there are some positive aspects to consider. An InvestingPro Tip indicates that management has been aggressively buying back shares, which could signal confidence in the company's long-term prospects. Additionally, another InvestingPro Tip suggests that the stock's current valuation implies a strong free cash flow yield, potentially indicating undervaluation.
It's worth noting that Ascend Wellness's financial performance has been mixed. While the company has seen revenue growth of 15.33% over the last twelve months, reaching $565.75 million, it is not currently profitable. The negative operating income of $0.81 million and a return on assets of -9.71% underscore the challenges faced by the company in the competitive cannabis market.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for AAWH, providing a deeper understanding of the company's financial health and market position.
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