RE:RE:Weed/Aphria chattergottahunch wrote: Canopy has lost the brands race in Canada and this could be the only way to get to profitability. Buy Aphria, who's brands sell well, and is already a low cost producer. I'm not a fan of Betting Bruiser, but I've long thought Constellation/Canopy is in trouble unless they make this kind of play. And Constellation is in too deep not to try something big, not yet I'm a fan of Constellation/Canopy. At the end of day, all I want to see is our SP up where we deserve to be. Morningstar had FMV around $14.50 I believe and that's the minimum I think we deserve. GLTA
Betting Bruiser, same guy that said there was discussions going on between Aurora and Aphria before it was officialy confirmed is now saying that :
Canopy Growth Corporation (Ticker CGC or WEED) may acquire Aphria (APHA), Link below
https://twitter.com/BettingBruiser/status/1312471525858058241?s=20
Now if it's not only rumors and it gets confirmed during the upcoming week this would be my opinion if I was an advisor on Constellations Board
- Acquire the only real competitor in the Canadian MJ sector without paying cash
- Acquire Aphria in a all based share compensation
- Eliminate the possibility a new big player (Tobbaco or Alcohol) enters the market with a cheap entry ticket
What I mean about my last bullet point is that think about it, Constellations Brand and Altria entered the Canadian MJ sector and overpayed. From memory, Constellations Brand payed 5B $ CAD for Canopy Growth and Altria payed 2B$ CAD. At that time I think MJ was not even federally legalized yet (to be confirmed, not important) . The point is that they clearly overpayed and now you have a player like Aphria that is :
- 5 Quarters in a row Ebidta positive (so near profitability)
- #1 in recreational sales (5 Quarters of sales growing in a row)
- #1 for revenues when you look at Fiscal 2020
- Least but not the last ,almost 500M cash on hands
That would be my logic, acquire in a all share deal to prevent my competitors from entering the market (Big Tobbaco, Big Alcohol, Big Pharma who knows) .
So let's pretend an imaginary Big Tobacco company called N00bC1G4R$ wants to enter Canadian MJ
I would be mad as a Constellations Brand advisor that N00bC1G4R$ enters the Canadian MJ at a cheaper price than me for a price that is worth it.
If N00bC1G4R$ was to buy APHA for double value all cash, so 4B $ CAD, it would be worth it in the sense that APHA is done scaling (Aphria One and Aphria Diamond) and is almost profitable so it's not like they will burn money like Constellations did (From 5B$ CAD to less than 1B$ CAD).
The fact that N00bC1G4R$ willl pay all cash for a company that doesn't need cash will just be an excuse to then use that same money to enter the US MJ Sector once it's legal since that cash would add to Aphria's Cash balance. That's something Constellations couldn't do, that's why they paying Acreage in majority with shares.
That was just my opinion, and fulll disclosure I don't put one ounce of hope in this rumor.
May do a Technical Analysis Chart post tomorrow to help everyone. I know I said I wasn't gonna post until next earnings but the action is getting interesting rumor + earnings coming.
If my previous post about Aleafia got burried and you didn't get the chance to see it, go in my post history, worth your time, CFO Carl Merton answered me personally.
Thank you for reading and sleep at night, it's just a rumor until it's officialy confirmed.