I hope you’re all doing well.
I received the voting package in the mail last week for my remaining 29,000 shares. I took a pause from averaging down after reading PedalMetal’s post about the extreme risk of penny stock investing, so these shares have a higher ACB (@.5205) than the other 600,000 shares I had sold. I’ll let them convert to Tweed, and since I’m only holding a very small position, I’m totally oblivious as to where the share price goes from here. I’ve kinda mentally written off this "investment". It’d be nice to get my money back; if not, that’s totally fine.
Although I’ve booked my loss, I wish with all my heart for a better outcome for all of you. When the news of the buyout just came out, I was still reeling from shock and hence not able to think clearly. But over that weekend, I had more time to dig deeper into Tweed’s financials and was appalled by what I saw. What I found even more perturbed was the exhortation by some of our members. This euphoria, I thought, must be ascribed to the men being high on weed, or, perhaps, a damaged amygdala (I’m only complimenting you on your fearlessness). :-)
I left hastily because I wanted to say something but couldn’t bring myself to do it. I understand that we might have investors whose life savings are at stake; we also have Supreme shareholders who will be converting their shares to those of Tweed, and it was hard for me to speak my mind. There was no chance that I’d convert to Tweed whose valuation was propped up solely on the impetus of hype—and that hype was dying down fast. This is the company whose management patted themselves on the back for losing billions of dollars within a span of two years by issuing themselves a 320 million dollars in share-based compensation. This is beyond ignominious; it’s indubitably marauding. Sadly, it’s also perfectly legal. With the rate at which they burn cash, the imminent risk is dilution and I saw no way out of it.
I couldn’t look forward to their financials when they stated clearly that they’re aiming for positive EBITDA by the second half of 2022. How you interpret this statement depends largely on your outlook on life. For a glass-half-full person like me, I’d add a minimum of 2 years. Ridingrockets probably never sees that day. Mr. OptGreen—an eternal optimist—is already urging all of us to start wearing our shades. Whenever I read his posts, I knew there’s “handsome rewards” waiting for me because “the proverbial worm (what’s that, Mr. Opt?) is turning”. I’ve never known an investor who’s happy regardless of where the SP goes. Hehehe...
At the time that I made my decision to sell, there was a very resounding voice within me that kept telling me that Tweed will tank to the 20’s and Fire to the low 30’s. It makes me sad to see honest, hard-working investors being deceived like this. I feel very strongly that this deal will not go through. They need 66 2/3% of the votes, not 50.01%. There was never any premium to begin with; at least that premium (sic) was not written in stone.
Even if you decide to convert to Tweed, the only factor that can escalate the share price is another wave of hype (looks like that’s what we’ll be praying for). In the meantime, our money (very little for me) will be eroding away in inflation. If you pay close attention, you’d be horrified by this beast. I’ve recently got into the habit of going over my receipts when I go grocery shopping because I can’t believe how much less I can buy with more money spent. I’ve also looked into adding another bathroom on the third floor of my house and prior to Covid, got a quote for 75k (nothing fancy, just a standard 120 sqft bath). The project was delayed due to lockdown, and now I’m being sent a new quote for the exact same thing from the same contractor, and the cost is 102k. He said the cost of lumber, materials, labour and tradesmen have all gone up significantly. That’s our current inflation. So your money is also taking another hit just for sitting idly in Tweed if the share price is stagnated for a number of years.
I hope Tweed will come back and modify the offer to be more fair to Supreme shareholders.