Emotions Are Getting The Best Of PeoplePeople's emotions are getting the best of them with respect to this proposed merger as per the shareholders voting in favour of this agreement. You cannot say this merger is completely one sided for Tilray. You can never let your emotions rule the day particularly when it comes to the Cannibis sector of the stock market.
The people who chose to invest in the Cannibis sector should know this, you do so at your own peril. This is easily one of the most volitile sectors of the stock market! Investing in Cannibis stocks are not for the faint of heart. The valuations of these cannibis companies has at times, and now are insane. Speculation, speculation, speculation plays a huge role!
Canopy Growth is the perfect example of this. It has a current market cap value of 12.39 Billion dollars Canadian, or 9.67 Billion dollars American. Really!!!! I am not going to go into all their financials, but they did a grand total of 477 million dollars in gross revenue. Their current share price is $33.28 Canadian. Canopy had an all time high of $76.68 Canadian.
Why are they soooo overvalued in my opinion. Two reasons: They were the "first to market" as a big player in the Canadian Cannibis Market, and they were also able to lure Constellation Brands into investing 5 Billion dollars Canadian into their company!!
There are NO Canadian Cannibis companies earning hundreds of millions of dollars in profit obviously. The share prices of each and every one of these Cannibis companies are ALL speculative on what might come to be...
In my humble opinion, if you currently apply the same metrics and all the in depth analyisis that you would to the non-volitile stocks as per the Stock Market to the Cannibis sector, you are in for a very rude awakening! At some point in time, the speculation will come into fruition, and analytics will be the benchmark! But for now, that is not the case.
The Cannibis sector will make you constantly shake your head. Tilray as we all know once ran up to $300 Canadian. A crazy and amazing climb!! Aphria made it to $24.75 Canadian. There are always synergies, factors, and yes emotion as to why some Cannibis stocks set sail, and others plummet. If only we had a crystal ball...
Once again, the merger of Aphria and Tilray is based on the Speculative of being one of the "first to market" in the United States, and being positioned to dominate the European Market. Aphria will be adding sales from Tilray, and will add better use of their capacity. This will clearly lower the redundant costs of both companies, and allow Aphria to impliment their intellectual properties on growing and scaling production. And ultimately, making the Aphria and Tilray merger the as the largest global cannibis company by revenue.
This will be very interesting to see where the Aphria shareholders stand on this proposed merger? Our neighbours to the south, Americans truly believe bigger is better!! Again, I do not like the difference in share price of what one would expect as 1 to 1 with respect to shares, or the 23% premium paid to Tilray shareholders.
Ultimately, price is what you pay, and value is what you get... Does Tilray offer that value??? GLTA
CanadianProud04