RE:Same story....Blizzy420 wrote: These debenture holders have been ruthless throughout the weed market in 2019 and 2020. It appears to me the same thing is happening to Sprout that happened to all other weed companies this year. They had their prices walked down by their debenture holders in order to force a conversion at a much lower price which leads to a much higher ownership stake of the company. In this case we have Cannacord Genuity, Eight Capital and Haywood Securities, all of them are familiar names that have made similar moves in the Canadian marijuana space.
I am not sure which investment company got what, but there were 10,750 Convertible Debenture Special Warrants issued with 667 warrants attached to each CD Special Warrant. Under normal cricumstances the owners of those warrants would have been able to purchase 7,170,250 shares that would have diluted all of the share holders. Instead they have been able to convert that debt and receive 78,571,428 shares instead; an increase of 71,401,178 shares or 10x the original agreement. Additionally the percentage of the company they own under the old agreement would have been 3% and now they have managed to raise that ownership level to 23% with a share total number of oustanding shares becoming 306,471,428.
After spending some time figuring out the old debentures that were issued this does settle almost ALL of their debt essentially trading 71 million shares for 8.25 million plus interest in debt relief.
The Good - Bye bye 8.25 million in debt plus interest payments
The Bad - Dilution f'n sucks
My belief is that the entire marijuana sector has been going through a massive correction lead by the debeture holders for 12+ months now and we have all fallen victim of that coordinated effort. I also believe that the strategy employed by these slimey investor groups was so far above the retail investors comprehension that we have all fallen victim to their game. Companies like Cannacord and Eight Capital have been all over the Convertible Debenture investing and have been the reason for the downfall of many companies such as Zenabis and the reason why Delta 9 stock where I have noticed the same names holding the debentures and influecning the market.
My final hypothesis is that these investors have done their damage to stock value and made out like bandits. However the downside no longer provides the ROI they are looking for. Instead they now own 23% of the company and have every reason to let this fly and not hold the stock price in check. It was likely these people that were holding the price down and walking it to current levels. They should thank us for lining their pockets with cash over the last 12 months, but we are by no means sunk. I am an optimist so I am going to try and view this as a fresh start with a noose no longer hanging around our necks. The numbers are reset, we are all pissed we got diluted, but looking forward I still see a very bright future. The unfortunate part is that these investors trimmed our upside longterm and there is not much we can do about it.
A final thought -- When I first invested at 78 cents I had about 5,000 shares as I eased into the waters. After a year of prices falling I managed to accumulate 100,000 shares for $25,000. If these investors had not walked the price down to 9cents I would not have been able to accumulate 100k shares. Instead that $25,000 would have bought me 33,333 shares. and to get to the levels I am at now I would have had to invest an additional $50,000 bucks that I do not have to gamble with. So despite the downside and the pessimistic view these debenture holders have created I believe that averaging down and being able to accumultae a boat load more shares I have done well myself in increasng my share of ownership and potential ROI.
This wasn't what we wanted on a Friday afternoon, but I believe I agree with the sentiment that this is the bad news getting out of the way before something bigger comes down the pipeline. Holidng strong and confident in the future. Although Monday could go either way, the future will remain bright.
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Solid theory B... I have been digging since the last NR and Filing of the 5.4M options grant and slowly connecting the dots. I suspected something was looming internally. Wasn’t sure what... I have to say that I wasn’t expecting an execution of 8m plus in renegotiated debenture shares.
Makes sense now, fuel up before the big trip. I may be wrong, but you don’t throw 5.4m share options plus another $8 mil on the fire before going to bed.
News is imminent. Don’t expect it first thing Monday morning, $PR works in mysterious ways. There may be a few fashionably late to the party that have yet to arrive. Perhaps even a cooling period for this ridiculous jump.
However IMO, the train is almost loaded and about to leave the station. Don’t be surprised if there is an adjustment in share price this week.
All aboard longs... the count down has begun.