Value of LABS/VIVO glaringly obvious in comps tableI had to butcher this table a bit so it would show up on my website as a photo but I will post a link to the full table in pdf sometime next week. For now this should help everyone that is a LABS or VIVO shareholder. The merged companies hold TREMENDOUS promise in an industry that is struggling to turn a profit - and drowning in debt. Several of the large names in this industry are at risk of filing for chapter 11 or being consumed at a deep discount by larger players.
Both Medipharm and Vivo are great companies but will be unable to survive longer term without a merger and potentially more M&A activity. But as you can see from my valuation table (microcap.com/gallery) , there is tremendous value and risk/reward opportunity if and when this closes. My line for Labs/Vivo assumes deal closing and Labs getting at least $6M from Hexo (from their lawsuit).
Years ago, through my microcap.com newsletter I was the first to write publicly about Aurora when it traded near 35 cents (well before the sector rallies). At this stage, we need to look forward vs backward at valuations. Too many mistakes have been made in this industry and too many grossly overvalued deals were done at the expense of investors - retail in particular.
But now moving forward, there are a select number of companies that could emerge from this and be very successful. Labs and Vivo being one of them (especially starting at this stage with a clean balance sheet). Cronos is also a beaten down beast with a warchest of cash to pick away at the sector carcass.
Companies in this valuation table that are drowning in debt and terribly high admin costs, can still move materially lower - they are highlighted in red. But as for the others, they could do very well in the years ahead. As sector investors we need to be looking ahead now and NOT what these companies "used to" be valued at or trading at. This is a new game and should be treated as such.
Danny Deadlock
www.linkedin.com/in/dannydeadlock 