RE:RE:REPLAY: CEO Live with Q & A hosted Feb 8Stuboo wrote: BORING!!! He said nothing we didnt already know. The lack of volume proves me right.
Niel is good at answering questions, and you could see how many questions pertained to the Wana Canopy saga. Not much more can be said about it yet.
I don't own any shares currently and am debating taking a position, but still not sure. The Wana uncertainty will continue to be a thorn in valuing this company until it goes one way or another and that is likely to be some time away.
The termination payment will likely be weighed as to whether it's worth paying or worth just letting the contract run out. As time passes the likelyhood of getting the full termination payment will diminish imo.
There are lots of new entries to the edible arena recently so I think retaining market share is going to be a challenge. What I don't like is if things go the wrong way regarding Canopy and they just let the contract run out without a sizeable termination payment Indiva not only loses Wana, which I believe is over 75% of their revenue, but Wana would remain as a massive competitor. By then other competitors will have also gained a solid foothold.
There is no way Indiva will be able to make up that market share. Gron etc is ok, but other entrants are moving in fast also. The easy market share getting days are over. Any new products Indiva introduces will slow the deterioration of market share at best imo.
And Niel says 3 years is a long time. He's right it is. I'm not sure if that's a good or bad thing though.
Would Canopy actually buy Indiva? I'm not sure they want to be in the business of paying royalties to produce multiple unowned brands just to get the assets for Wana production. They could likely set up production in space in their own facility for about $10 million, have less duplicate overhead, and they obviously already have distibution channels that would make any need for Indiva's unnecessary. It would likely take a 65-70 cent per share for Indiva to even consider an offer. Add 23 million in debt and that turns into $100 milion dollars. Highly unlikely Canopy would pay that sum to own Indiva when they would already own what is currently over 75% of it's revenue potential and would be uninterested in acquiring the other royalty contracts.
Tough call and a shame this Canopy deal put so much uncertainty into what should have been an unquestionable winner in Indiva.
While typing this out I think I may have just talked myself out of buying shares lol.