W - H - A - T a ToTaL.....unholy mess!!!WOW........Those financials were ALMOST as bad as expected! The only thing missing here, is an actual admission by mgmt that they're bankrupt or soon will be........AND..... according to those figures they WILL BE insolvent by years end. Having JUST enough cash left for another 12 months, 3 of which have already been booked & passed, leaving 9 more. 3 unbooked which have since passed, leaving 6 left. That's RIGHT my dear freinds......6 months to find some solution or miracle before the real end comes.
As a disclaimer & as i usually state, i'm not a s/h here and never was. As i never found these Pot stocks to be a viable long term or profitable business under the current conditions they were operating in. But i did swing trade a few of these now "up in smoke" businesses, no pun intended 8).....when things were really rolling & shaking, almost near their peaks, when the boos & good times were freely flowing during their better days. BUT was never an actual, serious & dedicated long term investor in any.......for any significant period. Just for short term trades & knew when to get the H out! If more folks were as more apt & perceptive as i, going in with their eyes wide open notcing the SIGNS, not so many would be in the dire situation they are now, stuck with massive losses on their shoulders, with absolutely NO WAY to recover them.
Now i really don't care either way with Canopy, if they go under or turn around. I'm pretty much neutral on the sector and don't really give a rat's behind which way the go or end up. But i still do follow this sector, because when current economic conditions & policy change, there will be a time to go back in to these stocks and invest in them with more confidence & a possbiity of some profit for both company & s/h. But THAT time just isn't right now. Not yet anyway as you can see from those God awful financial numbers. And talking about THOSE numbers, let's just take a quick look at them. I won't dive too deep into this, but i'll point out & touch upon certain things that investors should be aware of.
First off, THAT was one screwed up unmitigated mess of a report and it gave me a massive headache just looking at it and skimming through it. I NEVER seen such a convoluted, complicated, ridiculously long financial accounting report such as this. And i've seen some really bad ones in my time! For such a simple business model THAT was crazy too look at , read & decipher.....and makes one think if they actually did that on purpose to HIDE something lol.
So to begin, the first thing investors should be aware of is the cash poistion & how it drastically changed from the previous quarters. And taking about the "previous" qtr, i'll get into that in just a minute. In terms of avaiable cash, they're left with about $750cdn down from $1,3B. So basically they've "burnt" through ~$700M in one year. And have less than 12 months of cash left! So how did they survive up to now? Well, they liquidated most of their investments, which is a mix of term deposits, Gic's and investments into other companies. All of which raised the needed cash to pay for all those large overhead expenses. But now that option has been pretty much depleted and is almost gone! As they're left with about $100M in that "cash equivalent" coffer, along side with about ~$625M in actual cash. So JUST enough for another 12 months, 3 which have already passed.
Next up is the MASSIVE loss they reported. Which is $3 Billion......Yes folks your eyes are not fooling & you're not deaf or heard wrong.....that's B for billion. Now don't be shocked or start to panic (not yet!), as most of that reported loss were impairment charges or for you simpletons...writing down BAD investments. So how much did they write off? About $2,5B and the rest was an actual operating CASH loss. Of which the latter should be VERY important to note for anyone that's a holder. Why? Becasue Canopy is STILL losing a ridicuously amount of money JUST selling weed BEFORE overhead expenses. Meaning that COG sold still exceed actual sales, by a large margin. And EVEN if they fixes that broken aspect of the company, they would STILL lose massive amounts of money because of overhead!
So those numbers are basically the things to note in the report. Coming back to "previous" Qtr, another pet peeve i had with this report, was not being able to find the numbers for the latest quarter. After searching thorugh that 1000 page report, a few times, i was still NOT able to find them. So either they're not there OR they are well hidden somewhere. Having a look at them would have given investors a better understanding if things are improving or getting worse for Canopy. But alas, i couldn't find them so didn't bother to waste too much precious time trying to find them. But if you're a dedicated s/h, it's highly recommended you take the time to actual find those important numbers. It will give you a good idea where Canopy stands.
So where to things go from here for Canopy? Well, judging from those numbers, they're buying time but they're fast running out of it. The combination trying to service their massive debt load and their inability to control basic costs, even at the COG level, is slowly killing the company from within. And i strongly doubt that will chnage anytime soon. On top of this, the massive equity dilution that's been onging now for some time to raise much needed cash & convert some of that massive debt, will most probably continue well into the future.
Twelve months ago Canopy had about 370M shares o/s......fast forward today and that number now is a lot higher. How much higer? Well, that's another topic for discussion as i couldn't get an accurate & solid confirmed figure. In the report they state about 460M BUT on several reputable financial sites, i always find that number is closer to 600M .....on ALL of them. So who's right, the Annual Report or the websites? I tend to lean towards the finanicial web platforms, as they've served me well in the past and were always on point....always VERY accurate. So i leave that subject up to you folks to decide.
So how will the market react to that report today? I really can't see the reaction being anywhere positive. So unless there's some piece of news outside the company like some movements on legislation, some positive development within the industry or if the general stock market has a really good day, apart from that saving it a bad day, i think the stock will keep heading down from the extremely high & continuous selling pressures......which in my mind and based on that latest report, is completely justified. As i've been harping for some time now, about 2 years, i believe the equity is completely worthless based on the financials and most of the value left in the company is probably held up in the debt or with the debt holders.
Like Buggs use to say......That' All folks! And i hope i've shed some light on certain things and helped some of you folks make better financial decisions.
GLTA