CAV3MAN wrote: I really like these boards when people contribute to good discussion. Let me answer to a couple of points you’ve raised. I would like to point out that in my original post, I did add the caveate: “Just dreaming using my own scratchpad values but within reason.”
https://www.stockhouse.com/companies/bullboard?symbol=c.tny&postid=27004293 There's a lot of stigma associated with having a "penny" stock price -- taking it from dollars back to cents would be a step backwards. Tinley is a speculative play. It will be some time before its valued based on P/E. We are buying into this company because of the team, the products, the sector and the market they are targeting. We are buying into it to support a venture, in other words, a typical mj penny stock.
Also, the big boards have listing requirements about how much the share price has to be in order to be listed. Going to $2.40 would be a major step forward. Splitting would, IMHO, be a step backwards. You are correct. However, the TMX (TSX/TSX-V) have cautioned mj companies trading on the exchange that there will be implications pertaining to Canadian listed companies generating profits in the U.S. Not so for the CSE. Tinley is better off where they are until that is straightened out. It’s also the reason why Constellation investing in Canopy makes so much sense. Canopy isn’t operating in the U.S., they just have a large shareholder who is. Splitting stocks can be perceived in two ways: that the company has confidence splitting will be bringing more investors into the play (Apple for example) and the split shares will continue to rise. It can also be perceived as mismanagement. Just go and look at the history of Pazoo (PZOO pinks).
I'm not sure I understand the dilution angle. Assuming a 10 for 1 split for easy calculations, what difference does it make to have shares at $2.40 and issue 1M shares vs having shares at $0.24 and issuing 10M shares? If you are referring to my reference pertaining to dilution what I was alluding to was the company simply issuing more shares, diluting the value of our existing shares. This is the type of dilution every penny stock investor fears. I’m not referring to dilution as a product of splitting. I’m referring to splitting as a vehicle for revenue generation by Tinley. I’m not sure what the exact number of shares are that have been reserved for issuance, but the CSE does report 14,059,464 shares reserved for issuance. As a word of caution, their numbers are not always right. These shares provide the company with the ability to raise additional funds. Now, I admitted that $2.40 is a low number for a 3:1 split, but I’ve seen this happen in the past. If I had said $9.00 in four months that is too optimistic in my opinion. I think $2.40 is reasonable and conservative for a share price by April if the bottling facilities come on line, if product starts shipping,if advertising happens and if people like it enough to buy it again. So let’s say March/April rolls around and the share price is $2.40/share. Tinley has now burned through a significant portion of their cash reserves on production and advertising. Now I may be wrong here, but there are reportedly 14M shares available for issuance as I mentionedand by April they would be at $2.40 a share or thereabouts equaling $33.6M. If a 3:1 split happened at 2.40, the price would be $0.80/share, Tinley would have 42M shares but the value would be the same at $33.6M. However, look at the timing. The company would have just gone through Cali rec day launch with a pending Canadian launch. I’m not saying T27 will sell on July 1 in Canada and may not for another a year or two, but they will need revenue to create production facilities in Canada for both Hemplify and T27 and secure a consistent hemp and cannabis product source/supply chain (I have to wonder if THC.CN would be able to assure that with cloning). So, they split their shares 3:1, they now have 42M shares and Canada is getting ready for rec. ETFs and mj Funds are now knocking on the doors looking for shares for their offerings, but everyone is holding tight as their confidence builds from a successful Cali rec launch. Sure, they could cause a significant run up in the price, but remember the share price will always be what someone is willing to pay for it. And equally for what someone is willing to sell it at. So, if the run up happens post-split at $0.80 to, like I postulated $2.00/share, then those 42M shares reserved for issuance are now worth $84M. I believe that at $0.80/share and with public awareness accelerating that more, new people will buy in at $0.80 versus $2.40/share. And just to remind you: “Just dreaming using my own scratchpad values but within reason.”
But positive, constructive debate is always good and if I erred in my thinking, help me benefit by correcting me or providing another avenue for consideration.
rk67 wrote: There's a lot of
stigma associated with having a "penny" stock price -- taking it from dollars back to cents would be a step backwards. Also, the big boards have listing requirements about how much the share price has to be in order to be listed. Going to $2.40 would be a major step forward. Splitting would, IMHO, be a step backwards. I'm not sure I understand the dilution angle. Assuming a 10 for 1 split for easy calculations, what difference does it make to have shares at $2.40 and issue 1M shares vs having shares at $0.24 and issuing 10M shares? If the stock never split, then there would be the current 75M shares (or so) outstanding, and we'd issue 1M shares for a total of 76M shares and $2.4M in cash. Splitting 10-1 we'd have 750M shares (or so) outstanding, and we'd issue 10M shares for a total of 760M shares and $2.4M in cash. I don't get it. Same cash. Same dilution. Bad price perception. No? :-)
CAV3MAN wrote: Liquidity. Low volume outstanding. $2.40 may be low for a split but the other option of simply issuing more shares is unpalatable to long term holders and the board given that dilution hurts them too. I can see it happening.
Greede wrote: Why on earth would they do a stock split? What is the reason, cause or benefit to that? There is none. That would never happen. But I sure would like to see your price target of $2.40 hit!