Agrify Stock Doubles To Hit Over 1-Year High After $25.9M Placement, But Retail Wary Of Short-Covering Rally
By Stocktwits Inc | First Published Nov 22, 2024, 10:39 PM ISTAgrify’s stock crossed the $53-mark on Friday morning, marking its highest price since July 2023.
Agrify Corp. ($AGFY) stock spiked more than 49% to hit its highest point in over a year during Friday’s morning session, after securing a $25.9 million non-brokered private placement.
Shares of Agrify, a provider of hardware and software solutions for cultivation and extraction in the cannabis and hemp industry, crossed the $53, marking its highest level since July 2023.
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The stock's value has increased by almost 15x in the last month.
Under the deal, Agrify entered into securities purchase agreements with institutional and accredited investors, offering shares at $22.30 each.
Chairman and interim-CEO of Agrify Benjamin Kovler participated in the offering, purchasing 10,000 shares at a higher price of $38.76 each.
"We plan to allocate this capital into opportunities within our circle of competence to benefit stockholders. We are excited about the opportunity set and current consumer trends in cannabis and hemp,” Kovler said in a statement.
However, retail investors on Stocktwits attribute the surge to a short squeeze, driven by the stock's limited share float, which has created upward pressure on its price.
The announcement comes after Agrify's board approved a $20 million convertible secured note, with $10 million to be drawn at closing from a subsidiary of Green Thumb Industries Inc., which is also led by Kovler.
As part of the transaction, Green Thumb acquired an ownership stake in Agrify, purchasing stock and warrants from former executives Raymond Chang and I-Tseng Jenny Chan.
However, Agrify said it will continue to operate as an independent business and will not be a participant in the transaction.
The firm also said it will retain the majority of its existing management team and all of its independent directors.
Agrify’s stock has gained 171% this year so far, far outpacing the broader markets.
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