Waiting mode and hold your breathToday ACB is up above 70% just within a few hours this morning. Can it happen to RHT?
Both stocks have equal similarities -
Great assets - RHT has 100k+ patients , ACB has the largest plantations in Canada
Despressed prices - both are down over 80% from their 52 week high
Too many shares outanding - RHT has 138 million and ACB has more than double of this amount before the reverse split.
Overpromise and under delivery - Both still not profitable and revenue coming short of projection
The big difference btw both cos - in the lockdown it suppose to help each’s sales on increasing demand but RHT is shown to be slowed down by the distancing rules and traffic issues.
I am not going to touch bases with ACB but let’s look at RHT with its issues. This is to me the most opaque company I have ever invested in and still is. As a tiny company with a single service to sell their business model should not be that hard to understand. However things get a little complicated because of business is entirely about dealing with the US health care subsidies in both of its different States and in the Federal level. Probably management will never admit this - they are still in a learning curve to handle business within the US healthcare circles. I am glad they now have a new CMO to station in Florida to deal with what I call their weakest link.. I have hope that the execution can be tremendously improved once the lockdown is released. But at the end of the day the company must learn to be sensitive to shareholders and improve their communication in a timely manner. Trust in a company start with having a management with good governance. And that is what this management has overlooked for a long time.
Take note - I previously said the market does not like uncertainty and once the company gives a News Release on what Is happening and how it affects their business during the pandemic, be it good or bad news, the stock will rebound. It did a little and now stabilized without further bleeding. I am holding my breath on the Q3 results and the MD&A.