Post by
geodcan on Sep 10, 2023 10:37pm
I am really trying to figure out why
our team is working so hard to plug the drains of Canopy by layoffs, closing facilities, cutting skus and more to try to get us to profitability.
Then in almost the same breath we get a consolidation proxy delivered to us along with the fear that it brings out in experienced investors.
Consolidating a sharefloat is the easiest way slip the bad news to shareholders under the guise of "saving a listing"!
I have been caught in a few consolidations where you get your shares cut, in this case to a fifth or a fifteenth of what you own. The share price is supposed to go up commensurately which is where the deal gets done but experienced investors know that the shareprice is quickly depreciated back to the pre-condolidation level as the spectre and reality of arriving at this point is attributed to bad management.
Now you have a fifth or fifteenth of the shares you had but at the pre-consolidation price, so you got knackered!
This is not bad for everybody as lenders and preferred shareholders, STZ seem to be positioned for this and it will put them first dibs on a leaned out, almost profitable pot company that is on the verge of doing business in the US where a well financed, beat down pot company can thrive and take their place as a world leader, like they once were.
Canopy is well positioned with skus, market tested and tweaked for success plus they have brands that they know will work. They have experience and since STZ management took controlling shares they have hardcore business people at the helm and they aren't opposed to re-revisiting deals if they think they can get a better deal.
The only question I have, is will the investors of Canopy be on the ride or are we all at the exit?
I have no doubt that what an even beat down version of Canopy brings to the table is formidable enough to regain its glory especially with the dead weight cut and an eye on profits.
My personal opinion is that the consolidation proposal is unnecessary and is just an eay way out for management to hang on to a listing, which carries more weight than it should as Canada has several legal pot trading exchanges ready to step in if the States can't straighten out their own mess.
This company took the worst beating in the overall North American pot market and that was done by marketmakers who will shortsell a company's stock right to nothing while coercing with like minded players to spin a tale of doom and gloom.
Sadly it destroys companies of good potential which is why I think Canopy could survive, because they bring a lot to cannabinoid business and have a deal with Acreage inked and paid for to merge the companies for shares of Canopy swapped out with Acreage shareholders.
Experienced investors with consolidations need to chime in and educate the people who think this consoldiation is a good deal.
glta and dyodd