RE:RE:RE:RE:Don't get me wrong A risky short if they are granted the extension. They can probably sell the company for a premium.
meeting moved to the 25th last night
TaoTrader1 wrote:
Feb 24th it is then, for the debenture meeting. They are still not profitable, so will have to come to some agreement with creditors about the repayment of the $25 million debentures. This makes the stock very high risk. What happens if the creditors won't extend the repayment dates? In the meantime, the stocks gummies have gone from number one in California down to number 5 or 6, so either things don't seem to be looking up, or the competition has outdone them in 2020 and they've not been able to hold their position.
So they seem to be in an interesting, if somewhat difficult, position at the moment.
They have signed to start selling gummies in Europe, so are they going to transport them there, or start producing them there, we don't know.
What is worrying though, is that PLUS management does not seem to have reported this to market, or at least, I've not seen it. We only know this because the online European sales portal has reported it.
I'm starting to wonder if this company is beginning to appear less than professional, and hasn't kept up with the emerging junior cannabis companies in the USA.
So what has the management and directors been doing.
We spoke with there consultant Invesotr Relations company, who seemed more keen on trying to get us to invest in psychodelics companies they represent, than PLUS, which was a worrying sign for us.
The problem with extending debenture debt, is that it creates more debt in the future at a higher repayment price - a big problem, which can compound itself until a company becomes insolvent. I get a slight sense that the company directors have lost a bit interest here, or have lost some momentum, but I could be wrong.
They locked themselves into gummies, but everyone is creating gummies now, it's easy, and all the other companies also have vapes, and tinctures, and suligual sprays, and patches, and drinks, and a dozen other ingestion forms, while poor old PLUS seems to have been left with gummies and some chocolate brownies. I wonder how the debenture creditors are viewing this, and whether they are will to extend, or will try and call int he debt.
My gut tells me the creditors will be coerced into extending the debentures our to 2023, but they won't like it, and won't be pleased. However, if they are really risk averse, given the current COVID pandemic situation, then things could get a little difficult for PLUS.
The key takeaway here right now, is that their gummies are not unique anymore, and the company has not expanded beyond that to become vertically integrated.
Basically, it's stayed a stagnant company during 2020, while others of similar market cap have diversifited and grown and raced past it.