LDS UpdateThe next update on LDS will come in less than 48 hours in the March monthly report available on the CSE web site. This may provide a hint on the status of the financing and the stage of the buildout. Danny Deadlock will provide a more comprehensive update next week.
I don't believe Danny's timeline of up to 90 days for the financing to close will ultimately transpire. My suspicion is that Danny previouisly put his neck out and drew a line in the sand with a March 23 closing. That date has come and gone and he doesn't want egg on his face (again) with a new closing timeline target given it is something he clearly cannot control. I'm betting that he will provide additional colour in this regard when he reports on his site visit to Adelanto early next week.
Either way, the risk in my mind is not that Cannacord cannot close the financing. The risk is a delay in LDS' growth plans as a result of a delay in access to capital. LDS could blow up the Cannacord financing and switch to a non-brokered route. They may have to cut back the raise to say $8M but would be able to do this relatively quickly given 1) investor apetite and 2) limited due diligence for a non-brokered deal.
I fail to really understand why anone holding LDS would sell at this point. The story has not changed and if you liked it last week, why would you bail now at a lower price if the story is intact. In my mind there is only two groups of sellers: 1) those losing patience perhaps with a need to reallocate capital elsewhere and 2) those holding the 1.6M warrants that expire May 1, 2017.
For those in category 1, I'd argue that the risk reward ratio given the current C$27.6M valuation (55,115,846 shares x $0.50/sh) is skewed to the upside. The current valuation is exteremly attractive as it's literally one of the cheapest cannabis plays around relative to a group of other non-revenue generating peers. Plus there is that "LDS is in California cannabis play" story, yadi yadi yada.
For those in category 2, obviously you don't want to leave money on the table but the exercise price is C$0.45/sh so I'd argue that this doesn't provide a lot of torque given current levels and the drive to sell dries up quickly as the price falls from current levels.
I see the price action of recent days as a shakeout of weak hands and an opportunity for those that like and believe in the story to buy shares at or below the PP price.
~S