How bad will this get???.......................REALLY BAD. I hope most of you folks listened to my recent advice and liquidated ALL of your positions here, because this is headed for a real train wreck VERY soon. And if you were too stubborn, stupid or squeamish not to.......then my friends you're gonna be one real bad situation & a helluva a lot of pain.......Both physical, phychological.......AND financial. There is NO escaping this UNLESS you SELL.........
As i write this, there have at least half a dozen Class Actions filed on the behalf of former investors or current shareholders who have grievances against Canopy and its mgmt. Claiming deception, fraud & mismanagment. Now i'm not sure if those first two accusations are anywhere true or accurate but the last one is undeniable. But whether ALL this is true or not, it won't matter, just the fact that these damaging"issues" are being brought up is all the ammunition the BIG short players needed. Aside from the fact that Canopy has not been profitable or well managed almost since inception.
So this is my TimeLine of what i believe will happen from this point forward. The BIG Professional short players like the hedge funds & VC funds will continue to put pressure on Camnopy's stock by shorting to Hell & Back until the stock is completely broken. And as more Class Actions suites pile up, the more selling pressures build up on poor Canopy's stock price. Ultimately driving it down and triggering the minimum $1 exchange Rule.. Which on its own, is very bad & heavy burden to begin with..... for anyone....and so much worse for Canopy with all the added baggage it has.
So once the $1 "line in the sand" is breached.......all hell breaks loose! One just has to look at happened at Aurora Cannabis the first time around a few years AND the second time just recently. This isn't rocket science my friends. The Professional shorts are notorious for this type of behavior & actions. They WILL pummel Canopy into submission just like Aurora and anyone else that comes to that $1 deadly cliff. They will especially enjoy doing it with no remorse or synmpathy...all the way down... to a market darling like Canopy.
What will be really interesting here, is HOW Canopy mgmt react and deal with the situation, because they still NEED to service that huge debtload they have on their books. And there's no escaping that either. They HAVE to deal with no matter what. And trust me folks, attempting manage such a large liability, trying to find solutions WHILE your stock is being constantly pounded by short players is NOT easy or desirable. My guess is that mgmt will have no choice but to deal witth the debt issue asap while their stock is being massively shorted & they will attempt to eliminate as much as possible by taking certain actions to "convert" most of into equity. They have already taken some measures to start that process in the next 12 months.
I don't think they will eliminate ALL of the $1B debtload right away, my guess is that once the stock is halved from it''s current price, they will go one of either two ways. Immediate consolidation of share captial of at least 10 to 1 to preserve their standing with the Exchange and so they can issue more shares to raise money to reduce the debt AND have capital to operate as a going concern. Or......they file for Chapter 11 .....&....CCAA protection in Canada and go about the re-organize or restructure the company under that umbrella. In anycase, for s/h it won't matter which option they choose, because all CURRENT holders will be totally wiped out in both cases.
So with all that said......IM TELLING YOU AGAIN......GTHO....before you lose ALL! Better to have $1 in your pocket than NO dollars....
GLTA