OTCPK:NWKRF - Post by User
Post by
MisterMontrealon Mar 13, 2019 10:21am
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Post# 29478182
CALM DOWN PEOPLE!
CALM DOWN PEOPLE! Jesus. It's like somebody hit a panic button and people are all riled up. No, HIP is not currently worth $1.50 a share. If it was worth $1.50 a share it would be trading at $1.50 a share. There do not appear to be other suitors to buyout the company either, and if there are, well there is a clause in the agreement to allow for other offers. So good news, that.
I don't think HIP management would do anything to lose money... so maybe, after careful analysis of the situation by people on both sides of the deal, they did the calculations, and figure that the eventual profits it will be possible to obtain will be more by joining HEXO now at this price point than by waiting for another offer which may not give as many strategic advantages for both companies.
I'm trying to think of this in terms of a merger more than a buyout. HEXO has more than $250 million in cash available right now. They could have offered a cash deal and offered more of a premium. The fact that they offered shares tells me they want to work with HIP and not just buy them out, which is probably why HIP jumped on board to. As has been said by more people than I can count, a lot of them WAY smarter than me, the first few years in the industry will see consolidation. That is what this is.
If you bought HIP at $3 a share, than this is not good news, I agree, spending $3000 on 63 shares of HEXO, I'd be pissed off right now, and HIP is way more likely to get to $3 than HEXO is to $47.
But this "PREMIUM" nonsense is exactly that. Nobody is just going to come drop a bucket of money on your heads. The fact that HIP management ALL agreed to the deal already tells me that they know more than us and they think they NEED to do this.
If your buy-in is more than $1, you probably want to do some number crunching and see what your comfort level is. I think that HEXO is more likely to hit $16 with HIP joining them than HIP is likely to hit $1 again. One man's opinion, I've been wrong before.
Take it for my two cents. Feel free to discount it.