RE:Why the 3Q Investor Reaction I see your points, 'Investorpedia.'
What I'm seeing is more a lack of reaction. It doesn't help that the mj market sentiment remains in the toilet over all. The 'BUD BATH' continues.
But, let's kick it around anyway.
Investorpedia wrote: XLY has become an interesting turn-around story, and are on a nice path back to profitability. So why the negative reaction? So as an investor, I am thinking what can be the major disappointments.
First, large debt servicing is a big drag. 2nd, although they are increasing CDN market share, production limitations were a surprise. 3rd, no view for entry to US market. 4th, any hiccup to execution could lead to more share dilution, or increased debt.
Investor buy-in will depend fully on their confidence that the XLY ship will be kept steering in the right direction.
I for one, has a relatively high degree of confidence.
1. Auxly's largest debt bears a 4% interest rate. Find that elsewhere in the mj space.
2. Granted. Expected automation not being delivered was unexpected. With AUXLY's AMAZING performance through Q3 I would never have imagined they were pulling it off without the anticipated upgrades to pre-roll packaging. That's but a fraction of the business.
Crazy thing is, they pulled off 7.3% Market Share without it. HOLY SHYTE!
3. Make no mistake, Auxly has a view for entry into the US market but the opportunity to enter the US doesn't exist at this time. Even if US Federal Legalization comes to pass this year it'll still take another year to enact all the necessary regulations to make it happen. Germany is another big one coming down the pipe, as is Mexico. None of it actually exists right now.
Quebec, on the other hand, that exists. That's real! Auxly has made entry into the Quebec market a priority in the near term. That's FOCUS.
4. Execution is a strong point of the Auxly Team from my perspective. They adjust and pivot like no other mj company has done. They have done far more with far less than any of their peers or the so called 'major' mj companies. Most important they approach building the business like it was a battle field and they don't give up.
AUXLY is intent on WINNING !!
First CANADA ! Then the World !
They aren't just building a business. They are laying the foundations for an EMPIRE !!
Is that CONFIDENT enough for ya?
Hold tight mates!
cheers