Chalice Brands Ltd CHALF

A basic question

[Orwellian1984]

Let me ask my question by two quote from Howard Marks from his book "Mastering The Market Cycle"

"Any investment movement that’s built around a concept other than the relationship between price and value is irrational"

"Superior investing doesn’t come from buying high quality assets, but from buying when the deal is good, the price is low, the potential return is substantial, and the risk is limited."

We all know the price of GLH. What is its value? and which equations and parameters you used to come with your number.

Don't forget your answer also determines your value too. So please cut emotions and use a quantifiable method if you are capable of it. Otherwise I assure nobody will complain if  some remain silent.

[SlyestFox]

evilknevil

[SafeInvestor]

Good question Orwell... my take...this is slightly undervalued. now I believe the resolution for the debenture holders could potentially make GLH profitable in Q3. we know profit would be minimal but at profit fair price is 10 cents. lots of ifs but worth holding onto and buying up at 2 cents.

[Orwellian1984]

tnx SafeInvestor. Would you please add more details on how you came up with your number? Here is my input that I had shared it months back with small changes: I think the primary problem of GLH is not its negative EBIDTA but is two fold:  The significant debt it has The lack of trust by big investors due to its shady records and lack of transparency Its EBIDTA is better shaped

[SlyestFox]

theyve had years to be transparent and failed.

[Puffdragon6969]

1) if you remove 22 million of debt from a 16 million dollar company with 20 million a year in sales does not make a 160 million dollar company.  2) seems like a impossible situation to find someone to spend 20 million for a billion shares of a company for only 50% ownership of a 16 million dollar company. They could probably do a hostile takeover for a 20 million and have almost 100% with

[Orwellian1984]

Puffdragon6969 you explain the basics as you are the only one understand it. Maybe better to improve your reading skilles. You missed it fully and it was not for fun. The market cap is not equal to enterprise value. Also the spot price is not equal to the stock value. The question was from the stand point of a value investor. My input was also by the same approach. The claim was simple

[Puffdragon6969]

ok so your valuation is based on similar companies. Can you list these comparable companies you used?  Paying off debt with shares can be helpful to the price but there are a lot more factors to consider going forward. 

[Orwellian1984]

I did the comparision in January/ February. Have to find my post. But this is not the main focus. Meanwhile assume similar companies in the sector without debt (exaggeration) are priced X times higher than GLH. Let put the actual value of X under question for later investigation. Do you agree if the debts being paid of as the first approximation the GLH fair price will be X times its current

[Puffdragon6969]

cant mention one similar company? If you're going to keep comparing them I need to know who you're comparing against.  otherwise this is as you would call it "a arm waving argument" I just don't see this ever valued at 160million with what they have and I'm trying to understand how you do. 

[Orwellian1984]

There is no need to name any company. I asked my question in the most abstract way possible. Just pick whichever company in the sector that you wish. Just has to have low liabilities. If you have a model let disclose it and then we can test it from scratch. However, to help this is an example from December/January. Not the best one yet take it if you wish. 

[Puffdragon6969]

yes you do need to name them. You said GLH should be trading at x10 like these other company's, then I need to know who they are so I can compare and see if you are correct.  we are here discussing your model and how you came to it. 

[Orwellian1984]

puff: 1. I shared an example eventhough not the best one. Otherwise there will be always room for deflection of the question.  2. I have also asked an abstract question. If you have a model to answer the question why not just sharing it? We can test your model together step by step.  

[Puffdragon6969]

but your example is only trading x2.5. I want to know who's trading at x10 We are again talking about your model and calculations because you posted about it. When and if I ever post mine then we can discuss. 

[Orwellian1984]

Very Incorrect. Please and please read carefully. AMRS was priced $2.68/ share and it is now $4.62. More than 200x. and its liability was 1/2 its market cap, not zero. But please before looking for another possible bug answer the abstract question first. That could be a good start.   

[Puffdragon6969]

What are you trying to say with that??? You originally said Glh should be trading at x5-x10 like similar company's. I want to know who these similar company's are??  why is that so hard??     

[Orwellian1984]

That is not what I said. Ok! So please read it again below: I said if the GLH debts being paid of then its fair value has to be more than 10x more. Why because other companies in the sector with lower debt are valued much higher and the main problem of GLH is its debts. ARMS was a non ideal example I had ready to share from Jan 2020: market cap:20x of GLH liability: 1/2 market cap

[Puffdragon6969]

Even if the debt totally disappeared with no extra shares  fair value will NOT be x10 it's worth now.  you say it "has" to be x10 but don't give details why it "has" to be that high? Compared to who?   

[Orwellian1984]

I provided ARMS for comparision and support of my reasoning and I have also asked an abstract question. I completely ignore them and few times made incorrect quotes.  If you do not want to answer it just why keep buzzing? Fine, you do not have an answer or you have but as you know more than everybody else you do not want to share. So please let others if interested contribute.

[Puffdragon6969]

Well arms or amrs, I don't see them as a comparable company to Glh. So it leaves your reasoning flawed.  I was hoping you could convince that Glh is worth 160 million if you subtract their debt. But it wasn't meant to be. I'm done. Good night. 

[Orwellian1984]

You do not see it comparable does not mean you are right. but if you had an answer to contribute you could  1. answer the abstract question 2. tell us which company with low liability is comparable in your opinion. so we could put the numbers together to estimate a fair value. Anyway thanks  and have a good night.

[Orwellian1984]

I shared an example with numbers pluged by me. I have also shared a list from another forum. You read it incorrectly almost by a factor of 100. Apparently you are more curious for bugs.  I do not need to prove yourself. I know you are educated. From begining I wrote let assume I am wrong. Why not just answering such a simple question (screen shot) so we can build on top?

[Orwellian1984]

Once some one has shared this one in another forum. Now is outdated. Yet you can also take it as a guide. Please do not close the discussion by insisting on the market cap. In the 1st apporiximation you can scale the numbers or normalize by market cap to make them more comparable.  

[SlyestFox]

orwell is a paid pumper for the debenture holders.he makes things seem good when they are not. He has yet to ever prove his holdings in glh, but said that he increased them, yet noones ever seen any evidence of this.

[unclebobie]

I am in full agreement - just scooped another 100,000 shares  cheers unclebobie