TimMcCracken wrote: Buckshot26 wrote: Had some time to really digest this deal last night. I can't think of any others really like it and when you think it all the way through, I honestly can't believe that Bruce pulled it off.
In essense we sold the company but in a clever way that avoids A. a capital gain for us and B. allows us to participate in the future growth.
First and foremost it is important to understand that Constellation now runs the company. While they wont own >50% of the shares until they exercise their warrants, they do now hold 4 of the 7 seats on the Board of Directors. Any business decisions of real consequence (ie acquisitions and major expenditures) have to go through the Board. So in effect, as of now, CB is running the show.
Secondly this is no normal takeover. If this was a standard takeover CB would have made an offer for our shares. The money they put forth for the deal would go to buy existing shares and not go into the business. The way this deal was structured, where CB is buying shares from our treasury results in Canopy now having $5.6B, yes Bruce that is Billion with a B, in cash. That puts Canopy, who already was well ahead of the pack quite frankly untouchable both domestically and globally.
This isn't some biased opinion as I currentlyhold shares in 7 Mj companies and hold more TRST than WEED. It's just that WEED, as I said above, being now run by CB which is a $40B company with global reach and $5.6B in cash to play with, is just out of everyone's league by miles.
The $5.6B isn't the end to this war chest. Starting in October this company should be instantly cash flow positive which will just add to total. This money will allow them to both grow organically in foreign markets and buy anything that stands in their way. Pretty much an unstoppable force.
So if you share the belief that most of us along with CB do, that we are on the precipice of a worldwide shift in attitude towards cannabis than there is no better or more sure global vehicle to play that eventuality than WEED/CGC. The fact that this company was just capitalized for $5B at $48, following the senior convertibles of $600m again at $48 make this ~$42 level pretty attractive. I mean, how often can retail buy in below the level that "smartmoney" is?
Great post Buck.
I hate talking/ predicting share prices but in my opinion for this to not be at least $48/ share right now is a joke.
I think it’s being suppressed short term so the short position can cover with limited damage.
Another thing that also makes me mad is these other companies getting big increases off of our company. I get the thesis, as if Constellation values us so high then others must be valuable too.
Bruce Linton and the CGC team are the industry ... everyone else can thank them because with out there “$90 million dollar lossess” / quarter rec wouldn’t even be possible for some time.
The last 3 fall seasons Bruce and team have single handily lite the industry on fire;
Fall 2018 : Constellation invests $5 billion at a 51% premium
Fall 2017 : Constellation buys 10% of Canopy
Fall 2016 : CGC becomes first LP to uplist to a major index
Because of these historic developments all these other companies stock prices rose due to penny stockism.
The list of first for this company is ridiculous ... by far the leader.