The Cellular Goods PLC (LON: CBX) share price plunged 30.8% after revealing that it had terminated talks to acquire Cannaray Brands and Love CBD Health Limited from Cannaray Limited. The cannabis company cited changes in the deal as the primary reason behind the termination.
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Investors’ adverse reaction to the news was justified, given that they were looking forward to the acquisition, which could have significantly expanded the Cellular Goods product range from its current skin-care brands, which have not performed as expected. Still, CBX shares had recouped some of their losses at writing.
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Nevertheless, today’s announcement is a significant setback for Cellular goods. The firm has said that it remains focused on expanding its product range via internal research, which takes a significant amount of time and resources from the product design stage to testing and then commercialisation.
Most investors know that one of the fastest expansion strategies is through acquisitions, where a company buys another firm and integrates the acquired firm’s products and services into its portfolio.
However, this does not mean that Cellular Goods will not acquire another company in the future. Investors must be content with the company’s current product range, composed of science-back, efficacy-led wellness products.
Cellular Goods markets its inaugural skincare products as extremely potent since they are created in the laboratory using rare cannabinoids. The firm says the products can empower its customers to feel, look and function better.
The cannabinoids company started the year with significant changes as two non-executive directors Peter Wall and Simon Walters, stepped down from their positions on the company’s board and left the company immediately.
Mr Wall resigned from his position to focus on his other pre-existing executive management positions, given that he is the CEO of Argo Blockchain, which has faced challenging operating conditions since last year after the Bitcoin price crash.
*This is not investment advice.
Cellular Goods (CBX) share price.
The Cellular Goods (CBX) share price plunged 30.77% to trade at 0.45p, from Tuesday’s closing price of 0.65p.
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