"2024 Warning: Avoid the Once High-Flying Stock-Split Stock at All Costs"

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Source: The Motley Fool
"2024 Warning: Avoid the Once High-Flying Stock-Split Stock at All Costs"
Photo: The Motley Fool
TL;DR Summary

Stock splits have been a popular trend among investors, with forward-stock splits indicating strong business performance. However, reverse-stock splits, like the recent 1-for-10 reverse split by Canopy Growth, are often a sign of trouble. Canopy Growth's overestimation of production needs, poor acquisitions, and failure to understand consumer demand trends have led to a significant decline in its cash reserves and a going concern warning from auditors. With regulatory challenges and uncertain prospects in the U.S. cannabis market, Canopy Growth stock may face further declines in 2024.

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