PCLO still way way overvalued Some of you seem to think we have reached some sort of bottom. MY opinion is tht PCLO still remains way overvalued vs jus about every other cannabis name out there including just about all of the "Columbia" cannabis stocks.
The stock still strades at a ridiculous multiple based on its already widely optimistic 2020 and 2021 revenues. As I said before it still trades at 1.3 times 2030 revenues. Just crazy valuations. My .75 cent target is still intact although I think even at that price it is overvslued. Companies in Columbia such as Khiron, Avicanna and Cleaver Leaves are way ahead of PCLO in just about every aspect of the business. Several already have their licences despite PCLO's claims that they were the first. Heck, Cleaver Leaves has had an export permit for almost 5 months now. Khiron is already in mass distribution of CBD oils throughout Europe and South America. These guys are two years or more ahead of PCLO .
Beyond all that here are a couple mroe reasons PCLO will continue to drop IMHO.
1) They need cash very very soon. The financing will be at least 5-7 MM shares as they will need at least $20-$25 MM . IMHO they expected to get some cash back on the lousy Creso deal becuase Creso had a gizillion stock options excercisable at approx .46 cents. However Creso now trades at .37 cents and is dropping hard. Its now become a cash liability to PCLO.The deal has become a disaster IMHO. Many others agree withme.Its already laughable sales are also well behind projections. I predict the upcoming financing will be done at around $3. So it will eb 7-8 MM shares actually.
2) The short position isnt nearly big enough yet. Funds like MMCAP and Anson and others are shorting these guys and will continue to drive the stock lower and lower to get the best price on the cover ( financing) plus some free warrants. It could be a convertible debenture deal possible. Either way though it will be highly dilutive. They still need to short at least double what the current short position is . Thsi is standard stuff in cannabus names these days. Its the only way companies with zero revenues and short on cash can raise money.
3) The 20 MM plus in stock options and escorws that have now become free trading. Thsi stock cant handle a 30,000 share sale order let alone 20 MM. The stock will just keep dropping as the cheap paper keeps getting sold. Only one guy needs to file and he just using buy sell agreements to get around reporting.
4) PCLO can no longer do any distribution deals and such as ttheir cash pile is almost gone and the stock price is now their currency. Any deal they do will be therefore dilutive just like the Creso deal. The Aussies dont want to hold Canadian stock as 95% percent of them have no means to do so and trade out of it. So as we apporach the deal closing they are selling Creso en masse. Thsi selling hasnt even begun and will filter into PCLO's price through interconnected stock arbs who just traxde the deal spread.
5) $440 MM valuation as mentioned earlier is still ridiculous for a company with little to show. Lets talk when its a more reasonable $100 MM ( although I consider that even a ridiculous number for PCLO) considering Khiron who is way way ahead by at least 2-3 years and has much higher revenue projections is only $210 MM. Lets not even talk about companies like Harvest, Ianthus, VFF, GTII, OGI, TRUL, CURA. etc etc which are miles cheaper on a valuation levels and growth projections.
So my target remains .75 cents and with high certainly.