Newstrike Brands Ltd NWKRF

RE:RE:RE:HEXO SP Forecasting and thoughts (affect on WARRANT)

[silkroad007]

I agree there are many ways to look at it and each stock is different.  I would just epxect the same methodology when comparing two things.

You say the average high in the last 6 months is .20 for HIP.WT.A and you added 10%.  Sure... i'm not going to look it up but seems reasonable.  However the average high of HIP was not .88 in the same 6 month period.  

Each to their own in how they view things /risk but you are comparing apples and oranges if you dont apply that same methadology to each price you are comparing.  

quinlash wrote: I looked over the last 6 months of trading and seen a average high of .20 then added 10% margin of error.  I tend to set my expectations on actual trading patterns than the forecast from an online tool but thats just how I do it, I am sure there are many more ways to come up with a target price as well other than a warrant calculator, or my mehod, but everyone should be researching this and determining where they think prices will land and when.

JHMO 

silkroad007 wrote: How do you assume if HIP SP is .88 that the A warrants are only worth .22.   This is a huge miscalculation /assumption.  Last time HIP was at .88 teh A's were about .39, not to mention still undervalued in a warrant calcualtor. 

If HEXO reaches 14-15 and in turn the HIP SP valued at about .88-.95, you will see the A warrants north of 0.50.  Once the strike price of $15.79 is reached you will quickly see the A's close in on 1.00.

quinlash wrote: The leash around our necks gets slack at times and other times its really tight.. referring to the exchange of HIP share to HEXO of course. 

As noted before on the board it is reasonable to expect HIP will follow the HEXO shareprice within a cent or two until the vote takes place or something changes and we see a new offer come in.  Keep in mind if we do get a new offer HEXO is likely to simply shift the exchange a bit and more or less play a shell game where they rob Peter to pay Paul.  The net affect to our positions would likely not change much once the merger completes and we are all under the HEXO banner.  Anyhow, I don't want to start a war on the board over the likelihood of the deal going through or not...

Looking at HEXO Shareprice around QTR report and the run afterwards I would tend to think the HEXO high set post-QTR report would be the high we could expect once the deal is approved as investors were well aware of the HEXO/HIP merger at the time of the run. 

Quickly looking at the charts that high appears to have been $9.32 ( $.59 in HIP SP).  It would be easy to say that the high was more or less the value set for a new HIP / HEXO company and the retraction and new low is the value that takes into consideration the risk of the deal not going through.

When I look over the RBC evaluation numbers and projections (look under the research tab) I see a 12 month outlook on HEXO ranging from apx $7.00 to a high of apx $15.00.  If we take the average of those two we get $11  (.69/.70 HIP). 

I had seen another news article (forgive me, I don't have the link handy) that projected HEXO to go as high as $14 or $15, using the $14 target we see .88 being the exchange on HIP, using $15 we only get .95 for HIP... 

This spells diseaster for the Original Warrants as it can be easily expected for those to expire within a year, long before strike price (this is without considering the aging on them between now and the summer when the vote occurs).  For HIP-A Warrants its not so bad, investors can trade those back and forth until we get into 2020 and have a better idea if the strikeprice may occur in the following 12 months.

Based on this the short term traders are likely better off with the shares;

Buying HIP @.54 selling at .88 (HEXO $14) produces 63%
Buying HIP-A @ .16 selling at .22 produces only 37.5%

Not going to bother doing the org warrants calculations

Based on everything we have before us this appears to be a case of HORSESHOES and HAND GRENADAS.. where close isn't going to cut it for the warrants.  

The above is based on the HEXO deal going through, if a competing offer comes in we will likely have to start the voting process over again and will see more delays while the warrants age and we await to hear what the new offer would propose for handling the warrants.

Be sure to do your research and balance what you are risking vs what you are confident will produce a return.  Enure your projected returns from shares (worse case returns) cover any potential losses on warrants you hold if they should go to zero. 

At least this way you walk away even on the day...