Everything is being telegraphed here.....Cannot be more obvious than this. Any investors on this board and/or this company would be smart & wise to heed the words i've expressed here recently. If you haven't been following my regular commentary on the Cannabis sector for the past 3 years. Especially if you wish to retain any investment you have remaining in these companies, as little as it has become.
For those who are either totally lost or haven't kept up to date with recent events. It seems that battered & beaten up Hexo will the next inline to disappear into Pot heavan, with all that's been happening to the company lately. As the title states, it's very obivous where this is headed ovder the next 12 months, maybe even less than that. Imo, either this follows the same template Aphria did or it eventually slowly fades away & disappears by going into BK in the next 2 years. The former seems more likely than than latter, as it still has options to do so.
So assuming it follows the same path as Aphria did, what's the next step? As one has already shown its cards, with disgruntled dissident investors planning a coup as was the case with Aphria, whether successful or not its still very telling of the current situation. As that situation works itself out, i fully expect current mgmt to continue its attempts to fix their messy books by reducing debtload, reducing costs & improving margins. As i can't speak on the last two items, the debtload is a different story & the most crucial.
There is only ONE way the debt issue gets resolved folks, there's NO other viable options. The exact same way Aphria did it before their eventual demise and the way countless other in trouble pot stocks are doing it, debt for equity swap. Since hexo STILL has an eye popping ~$300M Cdn of o/s debt on thier balance sheet, this needs to be eliminated BEFORE any Aphria type merger happens. Unfortunately for CURRENT Hexo s/h, this means more massive dilution, much worse than the previous one. As the debtholders aren't going to go down fighting to easy or at least with some compensation, it would not surprise me to see the debt for equity exchange be done at sub 0.50 CDN.
Once this debt problem & control of the company by major s/h is resolved, i'm guessing it will pave the way for a white knight siutation and a buyout of Hexo. Therefore, taking into account everyting going on now and will occurr in the next year or so, i doubt VERY much this ever trades over $1 CDN EVER again. Imo, i strongly believe this will stay sub $1 all the way until the company is either taken out by a larger entity or undergoes severe re-structuring. Either way which ever path is taken, ALL current holders lose out big time. I don't see another alternative here.
GLTA