Trennam wrote: Buck, just catching up on what's going on here.
As for the secret sauce comment - I believe that was from a G&M news article (subscribers only) that Booth said:
" ... Mr. Booth said he couldn’t divulge much because the valuation technique was his
“secret sauce.” And when chief commercial officer Cam Battley was asked for cost savings from the merger, he didn’t have much to say, either. “We don’t have an exact calculation of the synergies,” he said. All he could offer was that the company’s chief financial officer and his team did the work, “and they all came out of that exercise with big smiles.”"
See more here Equity Guru by Chris Parry:
https://equity.guru/2018/05/15/aurora-cannabis-acb-t-either-smarter-everyone-else-medreleaf-leaf-t-deal/ Now the issue that some people have (including me,) is not the acquisitions themselves re: Cannimed & Medreleaf ... it's the amount paid and the massive share dilution that was issued in order to get them.
After the Cannimed acquisition Aurora's sp took a hit and kept on diving. I can't imagine what it will look like after the LEAF acquisition closes.
Going forward adding everything up in terms of Q and YR revenues - Aurora stands to be just ahead of Canopy .. but again at what cost?
You really think this sector will hit the Billion Dollar revenue in 2019?
That would be sweet. I for one am more conservative in my estimates and will say mebbe a few hundred million. (Not including all the other LPs.) I am thinking there will be a supply crunch for 2019 and with nothing to sell they won't be able to hit the Billion mark.
If other products are allowed such as Beverages, topicals, hemp products and all the other value adds that these companies are building out then yeah I can see the Billion dollar mark getting hit. Will see. Fingers crossed - I would love to be wrong on my conservative estimate.
Here is my personal take on what I would do if I owned APH and / or LEAF right now:
Dump APH real quick. Load up on LEAF and ride it til $28 to $30+ like Cannimed before the close of that deal and then just before it closes, dump LEAF like it was the plague.
I sure as hell would not feel comfortable holding APH for the short term after that. Give it some time to ramp back up when it includes all the accretive revenues and clocks in at around what $27+ mill? or so and then it will be ok to own again.
Til then - Canopy is the platinum god king emperor with NYSE and Constellation taking another what $9+ mill ? warrants come August. (And I will be very tempted to play that swing up and down - taking profits and buying back in on the upswing if there is any massive dips come warrants time.)
Just my take - it's the long weekend got stuff to do so chat later all.
Peace out yo.
Buckshot26 wrote: 55orbust, of course I remember the raises, I've been in this for the entire run, all the ups and downs. I think you're making a few mistakes here- not with owning Canopy as it imo is a rock solid investment that will do you very well- but more with some assumptions you are making.
1. Back when I started playing the mkt, jr explorations companies in the 1980's I wouldn't touch a stock with more than 20million shs fd. That's the way it was back then. So I get the sentiment you are hanging on to. Thing is, stocks are now worth billions and many of the big names out there today have a billions of shares. Number of shares is just a part of the equation. Decide what a company is worth, divide it by number of shares out and you have your share price. Pretty straightforward. There is no reason to believe how more shares out deters your ability to raise capital.
Secondly on that I see and hope there is no reason for Canopy or ACB-LEAF to ever raise money again. I see them both doing north of a billion in sales calander 2019. How they manage those revenues will be a big part on who emerges as number one.
2. I have no idea what the "secret sauce" comment is you keep referring to. Did Cam say that about buying LEAF? If so, I assume he is referring to LEAF's industry leading yields which have now been reported at 600 grams per square foot (Indoor) or perhaps their award winning genetics. But again, if you can give me some contect or a link to what you are referring to I'm happy to attempt to address it.
3. Revenues. The big LP's all got their licenses back in 2014, so it is my belief that todays revenues tell a very important story. Some are approaching these investments by looking at funded capacity. While I do love funded capacity I want to know who is able to see the most today as I can think of no better anolgue to future sales. Canopy has been my favourtie stock for the last two+ years because they have dominated in sales. They did this by acquiring the number 2 and number 3 in sales with Mettrum just over a year ago and Bedrocan just under 3 years ago.
Aurora is interesting in that they have had the best revenue growth in the sector. Many forget that unlike the other big LP's that got their licenses in 2014, Aurora didn't get their until a year later in 2015 and yet still organically they have been able to grow sales into the clear #2. I find it beyond strange that people hear want to dismiss that, and even odder that when Aurora does exactly what Tweed did with Mettrum and Bedrocan that they are villified as a serial diluter.
No way in hell does Canopy catch the LEAF-ACB combo in sales this quarter. My hope is Canopy does $25m in sales and that would represent a 20% sequential jump which we haven't seen in a long time. So unless ACB-LEAF sales drop. The big question is who sells the most when rec begins and do you honstely think it wont be close either way? I mean I get hoping and cheering for which ever company you're invested in but seriously, given the info we have in our hands today do you honestly see a clear winner emerging immediately.
Personally I see a two horse race, I own both. As more info comes to light I will adjust accordingly.
55orbust wrote: Hey Buckshot Canopy has easily raised as much cash as they want through bought deals. If you search your memory you might remember the Constellation deal and the BMO deal when all is said and done raised close to 750 000 000. If you search deep in your memory you will remember Bruce saying that lots of people have offered to give canopy money but he was very selective in who and what he selected. So you might be right that they can't use a shares in foreign markets other than the US, but they will have no trouble raising the money needed for any acquisition they would like to make. Aurora doesn't have the same luxury because they already have close to a billion share count and investors will be nervous to get involved. As far as Aurora and leaf making more money in the last quarter, no one can argue with you there. However that will be very short-lived and might even be overturned in canopy's report in June. If not in June then definitely in the first quarter during recreational marijuana legalization. Please elaborate on how you could even imagine that Aurora / leaf have the same capacity as canopy. You might have some trouble with that one. And please don't tell me that in two years they will because that means nothing. Unfortunately you made a mistake parking your money in Aurora but it's not too late to right your ship. You also didn't explain the "secret sauce" comment which completely shows Aurora has no idea what they're doing.
Buckshot26 wrote: Thank you for the respectful reply, I will do the same.
I beleive Cannimed is a joke so I completely concur with your assessment of them. There are those that believe that their labs and extraction facilities are valuable but I can't value something I don't know and therefore still can't believe ACB paid just over a billion for it. For that and other reasons before then I have not owned ACB since selling it back on that amazing blow off top Novemeber 16th, 2016.
LEAF on the other hand has long been regarded by the people I speak to as the smartmoney play. It had next to no retail following with almost all shares held by it's founders, Institutions and Hedge Funds. Without a single acquisition they were able to grow themselves organically into the number 3 LP in Canada in terms of revenues. Last qtr they did just over 11.35m in sales vs canopy's 21.7m. There are currently only 5 LP's in Canada doing over $5m in quaterly sales, the other being Aurora $16.1m , Aphria $10.3m and Canntrust $7.8m.
I think you are showing a real bias with a statement like you made saying the LEAF acquisition is not big. The number 2 bought the number 3 to become the new number 1. We can kick and scream all we want but this is fact. The combined ACB-LEAF recorded $27.45m in revenues versus Canopy's $21.7.
Next your arguement is flawed in that you state that Canopy has the capital to do a $4B acquisition abroad. You can't use paper (campany shares) to buy a publicly traded company in other countries. Once listed in NY they could potentially leverage Canopy paper for an American asset but no one in Europe etc is going to accept shares of a Canadian listed company in exchange for their shares. A deal outside of North America of any size will require cash.
How do you support your assertion that Canopy is number 1 and the race is over. Given they have almost identicle capacity and ACB-LEAF has 25% more revenues it sounds a lot like an opinion more than a fact.
55orbust wrote: Buckshot, I totally agree with that statement. However, I don't agree with the fact that Cannimed and Leaf are big acquisitions. I think the price paid for them was big but the acquisitions themselves were not. I realize you have a position I Aurora but please don't ruin your credibility defending these horrendous acquisition prices. How do you defend the "Secret Sauce" comment. If Canopy spent 4 billion dollars, which they eventually will do but not in Canada, let's be real and agree that Aurora could not keep up. While Aurora grossly over pays trying to catch up to Canopy in Canada, I can assure you that Canopy is building relationships and looking for the right(priced) acquisitions to make globally. The race for number 1 is over. Aurora needs to assimilate these acquisitions and try to make the best of them.
Buckshot26 wrote: Two lessons to be learned from this wikipedia entry, most of which is written on sh is absolute unsubstantiated bs and second big companies become industry leading giants through big acquisitions.
[url=https://en.wikipedia.org/wiki/Foster's_Group]wikipedia fosters group[/url]
investor1964 wrote: Has anyone ever been able to find out if Australia allows a full buyout of their corporations? I know it was rumored that Aurora was considering a buyout of Cann Group in Australia then that rumor died - I wonder if it was because they found out they couldnt? I agree it would be a good idea for Bruce to buy out Auscann if he can!
dirkdiggler3 wrote: Bruce said he will growth organically and not buy any canadian LP and i think it is fine. So we have some near term catalysts (NYSE,7 th june etc) and the sp should increase considerably. I think after the big run up it might be the right time to take over Ausscan and make it our platform for developing the Asia-Pacific region.This being done,they will have to stay on the lookout for opportunities in europe and especially be ready for usa. Just my thoughts,sorry for my english.