RE:R/S is opposite of dilution 1) If they didn't need the cash, they would have waited on consolidation and got an extension.
2) They are liquidating everything they own. They won't be buying anyone else up. They are going asset light. Why would they add the complexity/assets of anyone else to this mess? De-Klein couldn't run a lemonade stand in the Canadian market. That's why he's selling everything off and laying low wishing and hoping for US legalization.
If you like issuing shares to buy companies, head on over to Tilray.
quinlash wrote: Dilution is a term used to describe the issuing of additional shares therefore spreading the value of each share thinner (diluting their value)
A reverse split reduces the share count therefore the value of each share represents a bigger portion (share) of the company. This is why the SP goes up and all the historical prices are in turn adjusted upward after the consolidation takes place.
For the sake of agreement let's say canopy does indeed issue shares afterwards, why would they do this? Two immediate answers are
1) they need more money
But do they? They raised $50 mil at $1.09 / share not very long ago and they removed the cash burn of biosteel. We can all guess but we can all also access their quarter reports to make a more educated / informed guess.
2) they issue shares to take over another company
But will they? Is there a company or sector you can think of that they should go after?
Taking over another company immediately gives canopy added market share and there is value in that.
Pretty sure most on the forum only wish to daytrade so I wouldn't take any more of your time.
If there is an actual investor out there, then I hope this helped
Q