TSXV:RLV.H - Post by User
Comment by
AlwaysSkepticalon Dec 14, 2020 4:09pm
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Post# 32102253
RE:Risky to go short now.
RE:Risky to go short now. You're right...I don't play the short side until after the fins get published...and then will wait for longs to bite on the next mirage PR from Aurelio.
The issue: I believe that the financials thst are coming will be DISASTROUS for RLV: Q4 was April-June, and I don't believe that RLV did ANYTHING to change their spectacularly bad results from the first three quarters (revenues down 50%, continued losses).
Thus, I expect the Q4 to be a net loss of ~$400-$600k, and a FY net loss of $1.6-$1.8 million.
Their cash burn will continue, meaning that they'll need another raise. This will destroy any value in the stock through dilution.
I am HOPING they share more about this $20 million albatross of a deal. Anyone that thinks this is a good thing should go understand commoditized distribution:
- $20 million deal won at bid usually means margins in the 8-12% range...let's call it 10%
This means this bid "generated" $2 million in potential margin.
Bur WAIT: Aurelio signed the following deal terms:
- 10% paid upfront in cash: RLV just wrote away every penny of margin earned UPFRONT...
AND
- 2 million warrants at 5 cents...hmm, guess that adds to the 100 million shares and warrants at 4"5 cents already sent to friends and family.
What does that mean? 400x the daily trading volume sits at 5 cents,
blocking any upward movement as these folks will perform cashless exercises and profit anytime it crosses 5 cents.
So, who does this deal benefit? Only Aurelio...he gets a bunch of empty PRs, plus a few extra months of consulting fees while the suckers owning his shares debate whether it was a good deal.