U.S.-listed shares of Aurora Cannabis Inc. slid 14% Friday as investors digested a raft of bad news about the company, from the exit of its co-founder and chief executive to major job cuts, fresh impairment charges and guidance signaling more losses ahead.

The news prompted a round of price-target cuts as analysts reiterated sell ratings on the stock. That’s bad news for retail investors, whose enthusiasm for Aurora stock made it the most widely held stock on the trading platform Robinhood last summer, before a major selloff in the cannabis sector.

Stifel analysts led by Andrew Carter said the news suggested Aurora is in a far more precarious position than previously understood: “We struggle to find value for current equity holders, and we are reducing our target price to C$1, continuing with our sell rating,” the analysts wrote in a Friday note to clients.

MKM analyst Bill Kirk is also sticking with his sell rating on the stock while leaving his price target at C$2 ($1.50), noting the news that Chief Executive Terry Booth was stepping down represented only the latest management change in the past 45 days. In December, the company announced the departure of Chief Commercial Officer Cam Battley, the man widely viewed as the face of the company and a potential successor to Booth.

Battley and Booth had offered some of the most upbeat, and ultimately inaccurate, projections among all cannabis companies, a group that, as a whole, has not been strong at accurate forecasting.

“We believe this optimism, particularly around growth and profitability created an organization with a bloated cost structure and a capital structure with burdensome convertibles and a heavily diluted equity base,” Kirk wrote Friday. “Unlike Canopy (CEO termination July 2019), who could draw on Constellation Brands Inc. talent for staffing needs, Aurora will have a hard time attracting the talent necessary to instill investor confidence.”

Canopy Growth ousted CEO Bruce Linton, a co-founder, last July amid pressure from its biggest investor, Corona beer maker Constellation Brands, which invested $4 billion in the company to make it the Canadian market leader.

Jefferies analysts Owen Bennett and Ryan Tomkins said Aurora may get some help from hedge-fund manager Nelson Peltz, who became a strategic adviser to the company last March. Peltz, the founder of Trian Fund Management, is a well-known activist investor who has run campaigns to shake up management and operations at a range of companies, including Procter & Gamble Co., the former DuPont
and Dow Chemical, and General Electric Co. At the time of his hiring, the company said he would assist in sealing new cooperation agreements and with global expansion.

The latter goal appears to have been abandoned. The company announced plans to record asset-impairment charges of C$190 million to C$225 million and write-downs of C$740 million to C$775 million on Thursday, and said it would bring capital expenditures under C$100 million for fiscal 2020.

Aurora Chief Financial Officer Glen Ibbott said that the assets impaired are primarily in South America and Denmark, and the company’s “core Canadian cannabis assets are not impacted by these noncash asset-impairment charges.”

The company said it would focus on core areas including the Canadian consumer market, the Canadian medical-marijuana market, established international medical markets, and U.S. market initiatives. That statement and the write-downs suggest that Aurora will largely give up on international ambitions beyond the U.S. The company has established operations in Europe and South America.

“With goodwill previously [in excess of] 50% of total assets, this was a known risk,” said the Jefferies analysts. “No write-downs from Canada may be a surprise, but long-term growth expectations little changed by slower early growth.”

The company will likely try to recruit a new CEO with extensive experience in the consumer-packaging space, in line with two newly hired board members announced on Thursday, they wrote.

“Whether they can get this (and soon) remains to be seen however,” they wrote. Jefferies has a hold rating on the stock and C$2 share-price target.

Stifel said the company’s 2020 guidance suggests that cannabis revenue will lag its forecast by about C$20 million while it implies an adjusted EBITDA loss of C$67 million. Second-quarter guidance implies a decline in revenue from the first quarter, and the company is setting aside C$12 million in provisions to cover returns and price cuts.

“While market factors are well-known, this update suggests a weaker in-market performance, and we believe it will be difficult to improve from here while prioritizing investment,” the Stifel analysts wrote.

Like its rivals, Aurora has struggled to become profitable following a rocky rollout for legal cannabis in Canada, with red tape hampering the creation of a network of retail stores and allowing the black market to thrive.

With companies unable to get their product to customers, revenue numbers have disappointed investors and cash piles have dwindled, forcing companies into some desperate measures to raise capital. Many have resorted to the sale and lease-backs of real estate, or have canceled or revised the terms of previously agreed deals.

Codie Sanchez, a partner at Entourage Effect Capital, said the cannabis market is shifting from a license-aggregation phase to a product innovation phase to a market share-grabbing phase to — finally — a true execution phase.

“All of this will be good for the industry in the long term, but the price is this correction,” said the private-equity manager. “The silver lining — well-capitalized companies stand out because, as stocks fall, so do costs.”

Aurora stock has lost 78% of its value in the last 12 months. The ETFMG Alternative Harvest ETF has fallen 55% in the same time frame, while the S&P 500 has gained 23% and the Dow Jones Industrial Average has gained 16%.

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