Newstrike Brands Ltd NWKRF

Thoughts on NewStrike QTR Report and affect on Shareprice

[quinlash]

Been giving a lot of thought to what may happen with the HIP Shareprice once the QTR report comes out.  Thought I would share it with the board to see if anyone had a different view of things.

I am thinking that if we get a poor or mediocre sales numbers the HEXO shareprice will either pull back a little or stay flat, respectively.  If we get a strong sales number then I would expect the shareprice for HIP to quickly run up to par with the HEXO shareprice after the .06332 share conversion.  It may even go over par by a half or full cent with FOMO buyers and likely some amount of shorters hitting the stock. 

If shorters come out in full force (pretty sure there is an organized group of them hitting stocks at the same time) then the shareprice may go over conversion by 2 or 3 cents (just my guess) before the shorters start dropping shares back into the market resulting in a fast and dramatic drop in the HIP shareprice.

On a strong report the HEXO shareprice should (in theory) bump up a bit but I think the affect will be delayed until the HEXO investors start to react.  As with HIP, there may be shorters looking for an opportunity to short HEXO as well so trading (mostly for buyers) will be risky.

Considering the price at which each stock is trading at, the percentage gain factor is in favor of day trading holdings in NewStrike so those holding both stocks and looking to daytrade will likely make their moves for the intraday/short-term gain.

Long and short… if we get a strong sales report I would expect a completely ridiculous jump in volume.  Where it all shakes out and closes at (likely within a few days or a week post-report, as seen on the last HEXO run) will likely tie back to the new evaluation of the HIP/HEXO combination with some amount of price reduction to account for risk of the deal not going through.

It would be prudent to revisit your thoughts on where HIP / HEXO is headed, how likely the deal is to go through and what your thoughts are as to what the short, medium and longterm shareprice may do.   After that give some thought to what you will do on a poor, good or strong sales report and what price points should be targeted and what you will do once the price hits. 
If you have decided to be a long haul investor, and will hold regardless of the report, I would suggest trying to avoid looking at the shareprice the day the report comes out, especially if you are prone to emotional / knee-jerk trades.

You need to decide for yourself what kind of sales numbers you would need to see in order to consider it poor, strong or somewhere in between.
 
This may sound way too complicated, but it is essentially this is the same process you should be doing when first investing in a stock and planning your strategy, contingency plans and eventual exit of the stock. 

I have been a HIP bull for a long time, beaten, scared, mal-nourished, dragged through the mud and subjected to one form of neglect after another but I have already decided to ride out the HEXO deal and willing to wait until the vote this summer to see what happens.
 
Anyhow, hope this helps,

GLTA

[Bagofhammers]

Thank you for taking the time to put a well thought out post. Cheers, Mike

[Jack4000]

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[quinlash]

Hey Jack, Thanks for the reply.  I do agree that a positive report will drive interest in the stock but the market hates uncertainty / risk, the HEXO deal going through could very well mean that anyone buying HIP over the exchange rate could automatically see a loss on the value of their investment once/if the merger goes through. The upside of a strong report will be the likelihood of a

[Jack4000]

This post has been removed in accordance with Community Policy

[quinlash]

they could, true, and I like that.  I have discovered a major downside to the warrants now.. and that is the HUGE whiteboard you need to carry around with you to explain what a warrant is when your buddies ask you how your investments are going... lol

[Jack4000]

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[silkroad007]

Quinn I think you are a bit confused on what a short is and how its made.  They dont first buy shares and then sell.  Shorters, short sell a stock and then buy back the shares lower. 

[quinlash]

Hey Silk, What you are describing is referred to as Day Trading.  This is when an investor / shareholder believe a shareprice is going to pullback and there is an opportunity to sell their shares (or a portion of their shares) and then buy them back again later at a cheaper price.  Day Trading is also used to refer to short term trades where the shares are sold on a high then bought

[silkroad007]

Quin - I know what day trading is and i know what short selling is.   I have a margin account myself, although I never use it.  I prefer long. What you refered to below in the original post saying "Shorters" it implied short sellers not day traders looking to sell high and buy lower.  Thats simply called a day trader as noted.  However it is a long position just

[quinlash]

I re-read the original post, the quick reference to shorters is correct although I may have taken a short-cut in describing how the shares come back into the market, net affect is the same.  MM is an acronym and needs to be interrupted based on the context in which it is used, as noted, in the context Ggeeman and I were using it, it was in reference to Market Manipulators.

[DaBigRedCandle]

Question, Do you guys think it would be possible that we beat HEXO's qtr? When I run the numbers we had the capacity to produce about 12 500 kg/year during the qtr so 12 500/4 = 3125 kg produce and probably sold during the qtr. At a price of 5$/g we should expect 15 625 M$ in revenu. And we have not even consider what we had in inventory that probably have been sold also.  I wonder what

[EagerBeaver1972]

Don’t forget they had 3000 kg ready to sell before legalization, and also a deal to sell waste for oil production