Tilray Brands Inc. (TLRY) shares plummeted 5.95% in pre-market trading, marking a sharp reversal from the previous day's 22% surge. The cannabis company's stock is facing pressure despite reporting better-than-expected fiscal first-quarter results on Thursday.

The dramatic shift in investor sentiment appears to be driven by two key factors. First, Atb Capital Markets downgraded Tilray from Sector Perform to Underperform, suggesting a less optimistic outlook for the company's near-term prospects. Second, Tilray filed for a mixed shelf offering with the SEC following Thursday's market close. This move allows the company to issue various types of securities up to an unspecified amount, raising concerns about potential dilution for existing shareholders.

The pre-market decline stands in stark contrast to Tilray's impressive performance on Thursday, where the stock closed at $2.10, up 22.09%. The company had reported strong fiscal Q1 results, with net revenue of $209.5 million, up 5% year-over-year and surpassing analyst estimates. Tilray also delivered a net income of $1.5 million, compared to a net loss in the same quarter last year. However, the combination of the analyst downgrade, potential share dilution, and likely profit-taking after the significant rally has overshadowed the positive earnings report in pre-market trading.