GREY:CHOOF - Post by User
Post by
ProfPennyPinchon May 26, 2021 1:54pm
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Post# 33268734
$CHOO - Debt Restructuring with $ACB
$CHOO - Debt Restructuring with $ACB
Choom Cannabis just announced the restructuring of debt with Aurora Cannabis. The move by Aurora for the restructuring of the $21.8M of debt to equity (around 20% ownership) is a show of confidence that $ACB has in $CHOO. With the debt being taken care of for the time being $CHOO will be able to focus more on expansion and growth for the brand.
https://thedeepdive.ca/choom-restructures-debt-aurora-takes-19-9-stake-in-settlement/
$CHOO peaked up 16% this morning on the news, and it's currently sitting at a 5% gain today on the news. With a market cap of $31M, it’s looking relatively cheap compared to other competitors. For example, $HITI has a valuation of $418M with 85 stores giving each store a valuation of around $4.9M while $CHOO only has a market cap of $31M with 15 stores ($2.1M per store). If $CHOO was trading at the same levels as $HITI, that would make $CHOO worth around $72M with a share price of $0.22 now accounting for any new stores that’ll open soon.
https://www.prnewswire.com/news-releases/high-tide-acquires-one-of-the-original-ontario-licensed-cannabis-retail-stores-301279781.html#:~:text=About%20High%20Tide%20Inc.&text=The%20Company%20is%20the%20most,%2C%20Alberta%2C%20Manitoba%20and%20Saskatchewan.
$CHOO is significantly undervalued compared to its peers and competitors. With the height of the pandemic behind us and the vaccine rollout moving along, I can only expect more revenue growth to come in the near future with new stores opening up as well. Additionally, the debt restructuring with Aurora gives me a bit more confidence since $ACB is one of the largest cannabis companies globally. I definitely will be holding $CHOO at these levels.