Aurora Cannabis Inc. stock carried out a reverse stock split on Monday after shares plunged so much that the New York Stock Exchange threatened to drop the stock from its listings.

Aurora ACB, -5.22% ACB, -4.85% was a popular investment amid the boom in Canadian marijuana stocks that coincided with the 2018 recreational legalization of pot in Canada, amassing a huge pool of investors eager to own some of the more than 1 billion shares outstanding.

The Edmonton, Alberta-based marijuana company is the most popular U.S.-traded stock on mobile trading app Robinhood, according to the website Robintrack, which reports more than 900,000 users holding the stock.

Shares have been slammed in the past year though, plummeting from highs north of $9 in early 2019 to close at 69 cents Thursday, as the company has repeatedly failed to deliver promised profitability and hit other lofty targets. As the stock steadily marched downward, the company jettisoned top leadership and has continued to dilute its large share count by turning to the market for equity financing.

Aurora said that it would grant shareholders one share for every 12 currently outstanding, reducing the amount of shares from more than 1.3 billion to roughly 110 million, but also issue even more stock, diluting shares more than 30%, according to an analyst estimate.

Monday, when the share consolidation takes effect, Aurora investors could briefly appear to have a massive payday, as shares appear to gain more than 1,000% before market data is corrected to take into account its newly compressed share count. Given Thursday’s closing price, the compressed U.S. traded-shares should begin trading at roughly $8 once the consolidation is complete.

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As Aurora bundles 12 shares into one, it plans to round up or down to the nearest whole share instead of paying cash for shares that are left over. This could be important to smaller individual investors who do not own many shares. A company spokeswoman told MarketWatch in an email that shareholders with fewer than six shares won’t receive stock once the reverse-split completes.

Aurora is set to report its fiscal-third quarter earnings Thursday after the closing bell.

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According to Innovation Shares managing director Matt Markiewicz, the reverse split was largely expected by investors and Aurora had little choice. Innovation Shares’ holds Aurora stock through its Cannabis ETF THCX, -1.76% .

“They had to do this to stay compliant with NYSE rules,” Markiewicz said in a phone interview. “They can’t jeopardize the U.S. because of the large shareholder base here. There’s no way the company would risk cutting that conduit.”

In addition to splitting its stock to keep its listing status, Aurora plans to sell more shares to generate cash reserves after burning through a lot of its cash. Aurora plans to raise more cash via a stock sale, selling as much as $350 million in shares into the open market in small batches.

The company said it has exhausted its prior at-the-market financing program of $400 million, though it had said in the past its existing funding would be sufficient. April’s financing announcement means Aurora burned through more than $200 million during the company’s fiscal third quarter, according to Cowen analyst Vivien Azer. The company disclosed C$205 million ($146.6 million) in cash as of March 31.

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“The company intends to use a portion of this available capacity to provide further balance sheet strength and preserve flexibility given macroeconomic uncertainty caused by COVID-19,” Aurora said in a statement.

According to Jefferies analyst Owen Bennett, the new program represents a total dilution of roughly 30%, as of the stock’s closing price when the company announced the consolidation. “Today’s announcement of a further [at-the-market program], alongside language that suggests [how] this will be used, will be a blow to sentiment,” Bennett wrote.

Bennett has a target price of $1.45 and rates Aurora a hold.

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Consolidating shares also means Aurora will have to update the value of its option grants to its employees, adjusting the value of the options and the price at which employees can sell the stock to reflect the new bundled price. For many employees, that means the price at which they can sell the option will rise significantly above where Aurora shares will begin trading in May once the reverse-split is complete.

Azer wrote in an April note to clients that while access to cash is “a positive (particularly in the current environment), we continue to have concerns on the balance sheet.”

Ahead of the stock consolidation, Azer has a price target of C$2.50 and the equivalent of a hold rating.

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