Going concern? Definitely not the last financing... Bulls are full of shite or willfully blind to what is staring them in the face. Why raise money for opportunistic deals if they have amazing accordion features for acquisitions at their disposal? Why do a buyback if a financing is imminent at a lower price?
The simple reason is that their spin on cash flow doesn't match the underlying reality.
- adjusted EBITDA attributable to WELL shareholders DROPPED by about 10% on a sequential basis, larger than the drop to minority shareholders
- they have about $153 MILLION in financial liabilities maturing in the next twelve months, with only 36 million in cash today
- operating cash flow for the quarter was only $13.4 million. Remember that much of that operating cash flow IS NOT available to WELL because it is trapped in CRH joint ventures. But even if ALL of it was available AND IT GROWS, that will not cover their nut for the next twelve months.
- their working capital management is getting worse, not better
Bottom line? They are going to need to raise more money. This financing is just a drop in the bucket. And hard to justify any NCIB purchases above the financing price, so don't look for internal support on stock price.
You didn't believe us last time...maybe you will this time...
But heck, if you don't want to believe me, believe the WELL audit committee. In the latest financials, they snuck a going concern disclosure into note 4; that note wasn't there at year end or in the September financials. This only happens if you believe things might go sideways and want to CYA.
"Judgement is required in determining if disclosure of a material uncertainty related to events or conditions which might cast significant doubt on the Company’s ability to continue as going concern is required in the notes to the condensed interim consolidated financial statements. In management’s judgement, such disclosure is not required. This judgement is dependent on management's expectations of revenue, future net cash flows for the year ending December 31, 2022, existing borrowing capacity, availability of overdraft facility and financial obligations due within the next 12 months."
That language is secret boardroom code for "this is a going concern note even though management thinks we are a going concern."