RE:RE:I'm out tooTo say sp performance has been horrible would be an understatement. Still, is this the end for OGI? I don't pretend to know. Still, here's my case for not capitulating, as we tend to do when matters look entirely bleak and hopeless:
-Hexo and Aurora have been obliterated. Facts: both were weighed down by debt and mismanagement.
-Deaths of dinky cannabis companies continues to rise.
-Near all other publicly listed cannabis companies have suffered huge sp downturn.
-Shine has been off the industry for some time.
-Canadian rollout beset by potholes.
-Financing is drying up for many, has disappeared for others, potentially causing liquidity issues.
-Pandemic has caused a rush to exit risk on industries such as cannabis
-financial results across the board have been mostly underwhelming
-Industry momentum is clearly to the downside
Given the above, seems a stretch to make the case for not selling but here goes:
-OGI is not Hexo or Aurora. The company has been managed in a fiscally responsible manner from the start. As for the chatter about Greg's performance, I don't have a strong opinion, but I don't see any reason to find a fall guy to blame. While a CEO sets tone and direction, a company is more than one person. And I believe that the board of directors, with some highly capable independent thinkers who have a vested interest in the company doing well, would dump Greg if they thought he wasn't capable.
-OGI is one of the larger players in the industry. Agreements with all provinces, shoppers drug mart, and the full backing of the government of NB who wants to see them succeed b/c OGI's success benefits the province. Who knows where sp is going (maybe one day it will be green) but the company will survive.
-Trulieve is the only company whose sp has held firm. B/c it is financially successful. OGI starts turning profits, sp will recover.
-Financing remains available for companies that show promise. Alefia (half the market cap of OGI) hit a low of .32 in March, now trading at .68. They secured a bought deal offering of 13m @.65 on May 11. Today, reported strong Q results with 6.4m positive EBIDTA and other strong financials. I'm not promoting ALEF. Rather, I'm pointing out that the strong do survive and prosper. If OGI is to be around in 1-5 years, and its sp is to move up, the only way forward is improved financial performance ... just like any other company not trading on hype.
-Share price is disconnected from fundamentals. I'm arguing that any change to OGI has been to the positive, with more stores opening, more sales outlets, more product and high quality product that hs sticky consumer appeal. What has changed since they announced the deal with Shoppers and price ran above $4? Does one underwhelming quarter, the results of which were apparent before reporting, justify a drop from +4 to today? Regardless, market sentiment has taken OGI down. But this doesn't mean sp is a reflection of current or future value.
Is this a continued shakeout, weak hands capitulating or smart money getting out while they are able; or an excellent buy opportunity for a company that will eventually flourish? While I don't pretend to know, I do respect what the company has accomplished, how they've positioned themselves, and the fact that they have appointed higher calibre people to the BOD. More frequent corporate updates would be helpful but barring any word from the company, we'll have to wait on the Q reports. GLTA.