RE:RE:RE:jmo, I don't see any pot company taking over any other one.
johnale wrote: There is a little bit of a logical discrepancy in the statement:
"that being said you can make 4x your money on FIRE.DB plus interest just as long as they don't go bankrupt and are able to pay the debt off even if the stock is lower by then."
If..... fire is able to pay their debt - then that means cashflow will be of sufficient quantity to support the pay-back of 100mil then...... the EQUITY side - aka share price - may 10X the current share price.
If fire just "doesn't go bankrupt" or they refinance the debt - it may be a long time before you ever see the money from those debentures. might as well buy BANK stocks which are giving 7% return and equity portion will 100% be ok in 18months. there is no reason to invest in supreme if you don't think they will be profitable and successful - the debentures or stock.
BUT>>>> if you think fire will be profitable from here on out - the stock presents an opportunity to realize gains far greater than the debenture. debenture capped at 4x..maybe 3.5x based on ask.
Stock tradding at 15x ebita (once the industry matures) like alchol - even at 30mil annualized - 7.5mil profit/q (27mil quarterly revenue (maybe less)) from here on out - equals 450mil valuaiton.
1.27/share - which is more than 5x your money from here.
I hope you are right, they get free cash flow positive and are able to refinance the debt . The market currently doesn't believe they will be able to. If they aren't able to, they will dilute the equity. Why not own the debentures instead and have a higher probability of making money?