Aurora Cannabis Inc.'s /zigman2/quotes/210559470/composite ACB +0.10% /zigman2/quotes/203734337/delayed CA:ACB +0.08% $125 million equity offering announced late Tuesday may turn out to be a shrewd move, even though it will dilute existing shareholdings, according to Jefferies analyst Owen Bennett. The move is "not that surprising" and allows Aurora to capitalize on the huge gains its stock has enjoyed since Democrat Joe Biden won the 2020 U.S. presidential election. "While arguably confirming the current valuation as over stretched, and also leads to further dilution, you also have to say it is a shrewd move, especially with the US possibly opening up sooner vs later. Without cash, getting a foothold in that market will be very difficult," said Bennett. Aurora shares slid 14% premarket on the news and Bennett acknowledged that the dilutive capital raise "is a bit harsh on retail investors that bought into the stock in recent days." Cantor Fitzgerald analyst Pablo Zuanic agreed. "We certainly do not blame management for making use of the steep post-election bump experienced by the stock," he wrote in a note to clients. Jefferies rates Aurora as a hold, while Cantor rates it at neutral. Shares have fallen 68% in the year to date, while the Cannabis ETF /zigman2/quotes/213173823/composite THCX -0.27% has fallen 14% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.54% has gained 9.7%.