RE:RE:RE:RE:RE:RE:RE:RE:RE:ATM offering is NOT over until 2023Shareprice in 2021 already hit a high of $14 CDN as speculation on US Cannabis Legalization sweeped the sector. US Legalization is a WHEN, not an IF with this statement being coined in numerous articles and by many politicans that speak publically on the topic. Each week that passes we get closer to that "When" so, regardless of how you look at it, there are multiple cases to be optimisitic on better prices going forward than what we have been seeing over the last few weeks.
Day-traders are certainly enjoying the few percentage points the stock moves on a daily basis however, for myself and my investment group, we invest long term for larger returns and avoid the headaches of daily trading..... we use a lot of math... sorry if that is not something you are willing to take on.
Q
Long on HEXO
Zaybure wrote: Blah, blah, blah from the number one propagandist on this board. Here's a realistic view of Hexo's SP
provided no further dilution, which will most likely happen since the ATM will run until 2023: | HEXO | 2021 | 2022 | 2023 |
| Sales | 130.0 | 316.8 | 380.2 |
| Shares | 146.7* | 284.6** | 284.6** |
| X sales | 5.00 | 5.00 | 5.00 |
| P/S | 4.43 | 5.57 | 6.68 |
| * | Includes only | Hexo+Zenabis | ** No further dilution |
quinlash wrote: I believe this question has been addressed several times but I will summarize again in the event you missed it.
The issuing of shares for the purpose of raising capitial or acquiring a new company is considered dillution, correct. There are two types of dillution, good / bad. If the company is simply raising capitial for the purpose of paying bills then generally this can be viewed as bad however in the case of HEXO they clearly stated that they had no need to raise capital to cover expenses early in the year and noted any capitial raise would be for the purpose of expansion. A few months later they did indeed start a new round of expansion through the acquistions of Zenabis, 48-North and finally Redecan.
To determine if the cost vs. benefit is good or not you would need to run a Price to Sales Ratio formula to see if the projected sales produces a drop in the PS-Ratio (which will show the share value is actually higher). I ran these numbers and indeed see a drop in the PS-Ratio on each of the acquistions which point to higher and higher valued shares brought on through the incremental sales that the new aquistions bring to HEXO.
I would encourage all to learn more about the topic and do the math for themselves. A well structured spreadsheet will also allow you to do projections based on QTR over QTR sales growth as well as a means to project a target SP based on a target PS-Ratio you see as being reasonable for the stock.
The market sets the price so if individuals decide to sell their shares cheap then the SP drops however I can assure you that myself and my investment group have been holding and doing periodic buys while we wait for the market to wake up.
Hope that helps
Q
Zaybure wrote: Again you're trying to muddle the waters. My post was about dilution, NOT about how much cash Hexo has. That transcript you quoted was prior to the conclusion of the Redecan deal. So whatever cash it had at that time it is most likely long gone.
So if you can't answer my post honestly then stay out of it, no one needs your propaganda game. quinlash wrote: What I provided notes the ATM, it also notes additional information regarding the cash position of HEXO.... it is all related to the cash on-hand and cash position of HEXO.
Try reading over all of the call transcipts, also try listening to the interviews, maybe you will find some mention of a Fortune 200 company being signed by HEXO... that's a bit more than just a rumor.
Zaybure wrote: The problem is you are providing irrelevant info, and therefore misleading. My post was about the ATM. Your reply was about debentures and other stuff.
The only relevant thing in your post in regard to the ATM was the 45M. We are far from raising 150M the intended target, and therefore my initial post stands: there will be more shares issued, and more dilution. if you disagree, say so and why.
quinlash wrote: I am not confusing anything, I simply provided an extract from the Call Transcript. I trust that you have been reading all of that material over if you are actually holding shares of the company.
Zaybure wrote: You are confusing the ATM (May, 11) with the PO ( Aug 20). The PO was announced to be closed ( Aug 24). There hasn't been any announcement on the ATM being closed, so it is still going on. Hexo has about a year and a half to exercise its ATM of $150M. So far they have acknowledged
raising 45M, representing 30%.
quinlash wrote: Taken from 2021 Q3 Earnings Call Transcript
We raised CAD45 million off the back of our at-the-market offering. We are only branded for about nine days between the filing of the prospectus supplements and the — as we led up to the possible announcement of a definitive agreement to purchase Redecan. We also raised an additional CAD395 million of net proceeds through the issuance of a secured convertible debenture in relation to the Redecan acquisition. We’re currently sitting with about CAD194 million in cash in our operating accounts, and have another CAD275 million sitting in escrow waiting on the Redecan transaction close HEXO CALL TRANSCRIPT LIBRARY
https://seekingalpha.com/symbol/HEXO/earnings/transcripts