RE:The real deal Correct Bateman.
A play in ACRG was always a play on two things: 1. The ability of ACRG to roll-in licences and premises in multi states to grow their business. 2. Federal legalization.
ACGR has just substantially strengthened their hand at expansion and roll-in of new states and distribution, because they can still issue 58 million shares - that is a $1.4 billion war chest pending legalization at today's prices.
Murphy said it correctly:
"a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside."
The dilution without Canopy's support was going to be problematic.
If and when the Fed's evaporate their prohibition Canopy's ownership of the ACRG distribution platform into the US should give a big boost to Canopy ... thus the 0.58128 of a share could be worth substantially more than today ... or as you note quite rightly ... less.
That was always the case with ACRG and there was no huge home run driver until legalization, and in the meantime the race is on to build out and tie up licences and distribution. Competition is huge.
This is a SMART deal, and shareholders will benefit downstream proportional to their interests along with the insiders and management. On the other hand, if this deal had not been done, a lot of cheap shares were coming free trading and would have weighed heavily. Was a buy in the IPO at $25 a good deal - depends how big a slice you wanted, I haven't gone back to look at the volumes trades below that price, but opf course those who bought in after the IPO down to $14 or so have made a better buy. Hindsight is always 20/20. The game is in its early going. Quick flippers who though there would be a skyrocketting SP before Federal law changes, tough beans on you.
Murphy et al. have as much as acknowledged maybe the IPO price was a bit rich by giving back $2.55 so the net IPO price will now be $22.45, which is close to square, but the company has in the meantime expanded with several roll-up/in transactions, and Form Factory, now support and access to Canopy's brands and expertise, but particularly capital from Canopy, and if need be who knows, maybe Constellation is willing to pony up more cash if required - there is a massive competitive scramble to win distribution and licencing share.
I am shocked how many posters cannot read or understand the deal described.
What will happen when the business can be monetized and traded/promoted by Wall Street - it might just pump values by huge multiples that will make the Canadian legalization story look like tiny taters.
Just my opinions of course. It is a high-risk speculation, but the armchair quarterbacks saying they have been screwed over are out to lunch I believe.
cg