Canopy Growth Corp T.WEED

Canopy to Report Debt Free ???

[quinlash]

I have to get back into the qtr reports to scrub the numbers but roughing things out from memory I think it's possible Canopy could be heading towards a debt free report (this or next).

I trust most will recall that the company already paid off a billion dollars of accumulated debt and that upwards of 60 percent of their expenses are now gone through the sale of biosteel. These savings are no doubt are (at least in part) going against remaining debt. 

I have also been noticing that the size of PPs is dropping, indicating to me that less is needed while the company moves towards profitability.

Just sharing my thoughts here. As always I recommend doing your own research on things so as to speculate with higher degrees of confidence

Best Regards

[charlie007]

when is earnings, feb 9th?

[caretired1]

Unless some $500 million in debt disappeared or converted to equity since Sept 30, I don't think thats possible

[HighTime20]

Current portion of long-term debt and convertible debentures on last balance sheet (as of Sept 30, 2023) was just over 49 million.   Long-term debt sitting at just over 631 million.    They won't be reporting a "debt free report" but looks like they have dealt with the current portion of the debt. 

[BrokerG]

I think quinlash has been using the "product'. Canopy has over $630 million in long term debt. That is absolutely absurd for a start up/ young company. Finance 101- never accumulate debt until you are a well established "mature" company with free cash flow. Now they are scambling and diluting to pay the current portion of debt only. Unbelievable bad management.  We are

[lou64]

Pump pump pump in hopes some dope doesn't understand ? There is next to nothing that is available to sell off and they resorted to dilution then going out to refinance... WHY ? No interest and Canopy can not achieve financing from general market avenues because of massive risk factors ( premium interest rate) from down grading !!! Canopy as it stands DOES NOT a have the funds to operate

[Picker77]

https://simplywall.st/stocks/ca/pharmaceuticals-biotech/tsx-weed/canopy-growth-shares/news/is-canopy-growth-tseweed-a-risky-investment  Canopy Growth had CA$1.05b of debt in June 2023, down from CA$1.46b, one year before. However, it does have CA$573.0m in cash offsetting this, leading to net debt of about CA$472.1m.  This company is working hard to get out of debt.  They are

[quinlash]

Yes, there is the cash factor to consider but I would still recommend each and every person with either a short or long position on the stock to do their own research and make a rough estimate as to where they think the Feb 9 QTR report will land in terms of debt and sales figures.  I will assure everyone that their "guess / estimate" will be off by some amount however the exerise

[BrokerG]

Second of all, the sale of Biosteek netted = 30.4 million. The sale of "this Works" netted 4.5 million in cash and the rest (10.0 million) in a promissory note. Add them together for $35 million. If Canopy put the whole $35 million against their debt, it would still owe LTD = 631 million - Cash of $35 million = $596 million of LTD. So I am not sure why quinlash keeps harping on the sale

[caretired1]

There was a private placement of $50 million I think at $1.09 pre consolidation price and todays $35 million raised.  I thought maybe some debt converted but I guess it was q2.  Agree that debt remains but less than sept 30

[quinlash]

Post-Consolidation for that $1.09 is $10.90, the value was done in US dollars so apx $15.15 CDN Regardless of the conversions etc, the PPs appear to be getting smaller, that could be a good sign that the company simply doesn't need to do much now for raising additional funds.

[caretired1]

Or there is no market for them to find buyers

[quinlash]

Are you referring to Capital Markets or Consumer Markets ? Capital does not appear to be a problem, evident by the fact that they just landed $35 Million in a PP. Consumer Market is the same market as everyone is in.  For Canopy it's mostly Canadian Sales plus whatever they are pulling in from overseas Medical and Rec.  I know a number of other Cannabis Companies are doing sales

[caretired1]

If capital in such a small amount and at 42 cents pre consolidation is acceptable, I suppose you are right.  Sounds desperate to me when they swung once on the same PP and didn't close.  Can't say I seen that too often where a PP is announced and then fails.  Half full or half empty.....

[BrokerG]

 Getting back to the debt, since this is the area that will sink Canopy if not addressed. Are you saying,Apprentice, Canopy who paid $50 milliion for Biosteel, then accumulated $400 million in debt, afterwards? The CBC article says Biosteel had debts outstanding of $400 million. Why would anyone, assume that debt? and pay Canopy $30 million. Unless Biosteel declared bankruptcy and then

[caretired1]

I believe it was an asset sale under CCAA or bankruptcy protection so lots of unsecured creditors were burned.  But it didnt get rid of long term debt in Canopy I believe

[quinlash]

The debt carried by Canopy is stated in their QTR report.  That can be found on their website or through Sedar.com.  What portion of the debt was incurred due to carrying BioSteel is a bit harder to work out however the CEO noted that between 50-60% of their debt was contributed to BioSteel.   With BioSteel gone now whatever expenses they were seeing will no longer show up and

[BrokerG]

According to the CBC article, Biosteel was costing Canopy $15 million a month or $180 million a year. If that is the case, it will take approx 2 years to pay off the Biosteel debt, assuming no other cost savings or other asset sales. According to quinlash, 50-60% of Canopy's debt was from Biosteel, therefore, $315 million, as of Sept 30th. Wow talk about a bad investment. They paid $50 million

[caretired1]

If I read the cash flow stmt right, aside from Biosteel they lost $180 million cash in the 6 months ended Sept 30, ignoring changes in working capital, so ops were burning 30 million a month excluding what they burned with Biosteel.  Maybe its not 30 a month now, but its not producing cash flow.  If they could close on the purchases of Wana, etc, maybe there is positive cash flow there

[quinlash]

BioSteel was not net positive so it doesn't matter what cash they were bringing in from sales, it didn't cover the cost of having them as part of the Canopy Growth Company.  You just look at the cost factor that is now removed from the operation to see what the company is now saving from not having BioSteel Around. If you think your numbers are right then what you are projecting is

[quinlash]

You need to use the numbers as of today, including the SP.  Pre-consolidation numbers do not matter now and any PP will be based on these new shareprices etc. The same holds true for fundamentals.  Any fundamental you were researching and using to compare stocks with need to be adjusted for the new / lower sharecount.  Things like MarketCap take care of themselves but Sales Ratios

[caretired1]

My point is they issued at 42 cents when only a few months prior they issued at 1.09 - this is a bad trend and sign in my mind - but not in yours.  To me this tips risk reward to risk.

[quinlash]

I am sorry but your view in incorrect.  Pull up the News Release and point out where they state 42 cents, they don't do they.  It's around $4.29 USD, right.  The News Release doesn't make any mention of the pre-consolidation number nor will any news outlet make any mention of a pre-consolidation number.  Take a look over the historical price charts, they are

[charlie007]

its useful to consider the pre-con price to see how much you have lost or how much it really went down

[Apprentice]

Someone postet after the final sale of Biosteel, that Biosteel had C$ 400 Mio debt. If that was in the books and partially or completely gone with the sale could be an impact.  I didn't find a number about debt re to the this works sale. Maybe there has been some Mio as well ?? So imho not a bad chance to be debt free in the next quarter!!?? DYODD & GLTA 

[Apprentice]

Paragraph 2 Court filings for BioSteel, which was put into creditor protection by its owner last week, show the Canadian company owes more than $400 million to various entities in the U.S., Canada and Europe.   https://www.cbc.ca/news/business/biosteel-creditors-list-1.6972536  

[quinlash]

Canopy sold it off so it's not their problem now.  I trust that any debt outstanding on part of BioSteel was disclosed to the buyer so it's their challenge now. Not hard to see it was a good move on the part of Canopy to drop that one.  It's really too bad, I think the product itself was a winner.. obviously the marketing team when bonkers on spending.

[quinlash]

First off, I am pretty sure your number is wrong, secondly we need to consider the cost savings from BioSteel being sold off and those savings being applied to debt.  The Company noted that some of the proceeds of the sale also went to debt repayment.  With / without the sale of BioSteel Canopy Growth was paying down debt in earlier reports as well so I would suspect that activity is