RE:RE:RE:Anyone still holding a short position I've been thinking about the constellation deal again lately. Obviously this was huge for canopy and the entire sector. Lots of positives from this with the relationship forming between canopy and CB. A big win then and in the longterm.
However, what I've been pondering lately is the effect this will have on share price when CB options to buy the additional 10% (which they'd be crazy not to). They have the option for 10% more at 12.98 to be exercised either Aug 1 2018 or Feb 1 2019. I wish it was between that timeframe and they could option it in chunks, but my understanding it has to be done on either of those two dates.
We are trading sideways which to me is a good indicator that we are near/at the bottom, so let's assume the run starts for canopy and the sector very soon.
What impact will CB optioning this have on canopy's share price? On one hand, it will be a great news piece. I can picture headlines 'Constellation buys an additional 10% of canopy growth!!' Which will give a very bullish sentiment and further validate canopy. So again, the sentiment this will convey will be very strong. And I can't imagine constellation selling one share, in fact they'll probably want to accumulate more, if their desire is to consider a potential buy out at a later date.
But in the short term, what impact will this have on the share price? 10% is a lot and at an extreme discount, even with this pullback. I'm hoping CB waits until Feb. I'm wondering if canopy and cb have had any talks on this to be strategic in timing this.