Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Newstrike Brands Ltd NWKRF

"Newstrike Brands Ltd is a licensed producer and cultivator of medical cannabis based in Brantford, Ontario. The company cultivates and sells both forms including dried and fresh marihuana."


OTCPK:NWKRF - Post by User

Post by mathandmasson Sep 06, 2018 1:13pm
166 Views
Post# 28573264

Tragically unHIP story is very simple. No conspiracies

Tragically unHIP story is very simple. No conspiracies

All the "stockmarket gurus" with their wild theories how someone is "manipulating". Lol. Nuthouse. The story is very simple. We're all here for the same reason: we got stuck holding a trash stock. And the reason why we got into this trash stock is because of how much it was crashing after the Aurora flop. We thought we were getting in at a significant discount, then we averaged down a few times, but it just kept sliding - from a once (ridiculous) $3.50 to $0.40. It's ok, we made a bet, but we were wrong. We did not calculate in a few things: that this is one of the worst managed companies in the sector. In fact, when Aurora refused to buy it saying it is a "terrible company", we should have paid attention. Those folks have done some due diligence. Yes, HIP is moving on general market momentum, but it fades quickly because there is nothing originating from the company itself to support it.

Here is the thing. Jay Wilgar is completely disinterested in running a business. He does bare minimum: got a license, got a couple of supply agreements (for undisclosed amounts, mind you, which would have been key to put ANY value on this majestic enterprise) - what everyone else did. Other than that - meh. Even providing regular corporate updates turned out too much of a task: where is the news on construction progress; extraction facility? Nothing.

Jay's plan has always been to sell the company at a premium and move along. Running a company, especially in such a competitive landscape is a hassle. One acquisition almost happened but fell through when the sharks came. No Jay is sitting looking at his phone waiting for another call. And it's not ringing. The reason for that is the sector has changed a lot in the last 9 months. Tons of companies, most are better run. It is also much easier to buy a few private producers than a public company with gazillion shares on hands.

It still can happen, but you know what? Companies are not always bought at a premium. What is premium for Jay and the board might not be a premium for you. Hell, even at $0.40 per share he probably would have made a sweet bank. Your average cost is a very different story. So even if acquisition comes, it might not be all you hoped for. It might be part of Jay's strategy in fact - keeping SP so low to make it a more attractive target. HIP is undervalued compared to other licensed producers with supply agreements. However, all we know is that in the 9 month nobody expressed any interest.

Even though your goal and Jay's goal somewhat align at this point (to get out of this thing) the results for you may vary. It sucks that HIP became such a massive value trap. I feel you. I am in the same boat. But as I've said a couple of months ago, there is only one thing that can be done - investor activism. Something that happened today with HEXO, when a large shareholder said: "Dudes, we believe you're not running this thing right." That can force Jay to do a bit more. The key to this is those private entitites who provided the previous 2 rounds of financing and are currently also stuck.

The way things are going, HIP could be back above $1 some time in October based on just general market tailwinds, however, between now and October it could also slide back to $0.50 and making the journey to above $1 is a 50/50 possibility. It is much easier from 0.80 but HIP fails to stay at $0.80 because in this "no man's land" between $0.50 and $1 you have to have some strong and constant PR going to reassure investors that all sort of things are happening. And this is not what HIP is doing. That's all there is to it. No "manipulation". There are much more interesting companies to manipulate if anybody really wanted to play those games. Take recent Cronos 28% drop and recovery. Cronos is at least visible, unlike HIP.

<< Previous
Bullboard Posts
Next >>