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Highlights:
- The BGXX stock soared more than 36 per cent in the pre-market hours on Thursday.
- The company recently announced that it would purchase 25 per cent of a UK-based pharmaceutical firm.
- Bright Green claims to be among the fewer companies that have the federal government's approval to legally operate in the cannabis sector.
The Bright Green Corporation (NASDAQ:BGXX) stock appeared to be on the investors' radar on Thursday, September 1, as witnessed by its increasing price in the pre-market hours.
The price of BGXX stock was up over 36 per cent in the pre-market session after closing at 32 per cent higher than its previous close on Wednesday.
Let's explore the recent developments that may have driven the rally of the BGXX stock before taking a closer look at its stock performance.
Why is Bright Green Corporation's (NASDAQ:BGXX) stock rising?
The BGXX stock seems to be drawing attention after it announced that it would acquire 25 per cent of the cannabinoids and cannabinoid-like compounds-focused pharmaceutical firm Alterola Biotech Inc. (OTC PINK: ABTI).
The Florida-based cannabis firm is among the few firms that have the federal government's approval to legally grow, produce, and sell cannabis and its related products under federal and state laws.
Bright Green announced on August 30 that it had signed a letter of intent with Alterola to initially acquire 25 per cent of the issued and outstanding common stocks of the firm for about US$ 4 million.
In addition, it would get a six-month option to acquire the remaining issued and outstanding common stock of the UK-based pharmaceutical firm for an additional US$ 6 million and about US$ 40 million in BGXX common stock.
Under the strategic partnership and its terms, Alterola would have access to the cannabis and cannabis extracts and other related products of the Florida-based pharmaceutical firm.
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Financial highlights of Bright Green Corporation:
In the latest quarter, no revenue was reported by Bright Green, as it is in the initial stage of starting its building facilities for growing, researching, and distributing cannabis, the company said.
Its total operating expenses in the second quarter of fiscal 2022 were US$ 19.18 million, a significant jump from US$ 0.43 million in the year-ago quarter and US$ 0.73 million in the previous quarter.
The net loss of Bright Green was US$ 19.18 million, which it said to be in line with its expectations.
Bottom line
The BGXX stock price was up 36.23 per cent at 8:26 AM ET on September 1, after closing at US$ 1.38, up 32.69 per cent on Wednesday. In the pre-market hours, its volume was about 8.66 million.
The recent strategic partnership and acquisition announcement of the US$ 302.05 million market cap company reflects its push to expand in the cannabis sector.
However, penny stocks are generally riskier and more volatile than other assets, for which the investors should closely evaluate the company before investing.
