Newstrike Brands Ltd NWKRF

RE:RE:RE:Friday

[WoahSwerve]

Here's why (also, I'm not a pro trader):

https://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00022277

Open up the Interim Financials released on September 27, 2017 for the 3 months ending June 30, 2017 and the statements from November 28, 2017 for the 3 months ending September 30, 2017.

This is based on deal falling through and CMED giving HIP $9 million.

On September 27, 2017:

• Releases financial statements for months ending June 30
• Market price = $0.34/share
• Book value = $0.029/share ($11,426,819 shareholders' equity / 388,584,346 outstanding shares)
• This yields a P/B factor of 11.56

On November 17, 2017:

• HIP confirms CMED looking to acquire
• Market price = $0.51/share
• Assuming book value of $0.03/share
• This yields P/B factor of 17.34

On November 28, 2017:

• Releases financial statements for months ending September 30
• Market price = $0.51/share
• Book value = $0.033/share ($12,984,090 shareholders' equity / 388,584,346 outstanding shares)
• Yields P/B factor of 15.30
• Market is stagnating, is company really worth 15 times is liquidation value?

Looking to Future:

• Assume P/B = 12 (P/B from before merge news came out)
• Share capital = $21,984,090 (add $9 million to last financial state shareholders' equity)
• Outstanding shares = 389,534,346
• Yields estimated Book value of $0.056/share
• Market value estmated to be $0.68/share (estimated book value X assumed P/B)

Comments:

1. Valuation is lower than what CMED valued HIP. Probably means that folks will still pay more for shares than what company is worth
2. Raise P/B to 17-18 (closer to P/B when acquisition news broke)
3. This gives market value of 0.$96-1.02/share

Major Questions:

1. Do shareholders/potential investors still believe in HIP management?
2. Investors showed that they were willing to pay 99X (Jan 9 market high was 3.3, book value ~ 0.033) based on acquisition. What value does HIP offer without CMED?
3. How long will fallout last?