Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Is anyone surprised by how well Cresco pps is holding up? I mean it has every right to with the extra $50M added to the balance sheet, the harvest, and Illinois going recreational Jan.1, but still, the premium is so large. 1.266 x your current balance.
(CRLBF PPS x .7031) divided by ORHOF PPS X your balance = CRLBF balance after conversion.
Premium tightening down to 26.666%
Gap down to 26.666%
Cresco $6.49 x .7031 = $4.56
Origin $3.60
Gap $.96
$.96/$3.60 = 26.666%
Yes, and the window is closing fast.
This is the time to buy. People will be kicking themselves in hindsight. There are a lot of companies in this sector that won’t make it. This is not one of them.
Yup. When I first was in the stock last April it was almost $9 a share and it was for .84+ shares of Cresco. Then Justice Dept got involved and the MJ sector tanked. This deal is good for both companies and is set to close by the middle of next month.
I’m tempted to do it myself. This deal is done, barring unlikely developments.
I do believe you are correct. Time for the arbs to start doing their thing.
The hedgies will start buying ORHOF and shorting Cresco. Actually, I believe they’ve already started.
99+ approval for the deal so far!!!!
https://finance.yahoo.com/news/origin-house-announces-significant-support-133000206.html
My pleasure, glad I could help.
Now hopefully, we'll make some money.
Agreed, not for the faint of heart.
I'll just stick to buying ORHOF;)
I want to thank you Stockplucks for walking me through it. Wouldn't have gotten it without your splainen! :¦»
Buy ORHOF and short .7 Cresco. If the deal closes you are guaranteed a 1.20 profit per share. Not for the faint of heart.
I'm with you, that's why I bought ORHOF. We'll find out soon enough.
I believe all the regulatory hurdles have been overcome and all that's left is the vote. I can't imagine the vote going against the buyout especially with Cresco's PPS increasing and that it seems it's a pretty well run company. Plus, the prospects are so bright with them being located in Illinois and Jan. 1st just around the corner. My question why is not one of the top 5 stocks trading in the MJ sector?
If you think the merger is going to happen, then ORHOF appears to be the better buy. But honestly, I'm surprised the gap is that large, you would think with the deal expected to close next month, it would start to tighten up.
Is that the correct way to look at it then?
You are correct, the conversion rate is based upon shares.
1 = .703
I tried to explain what I believe the other poster was saying, that based upon current pricing (at that moment in time) ORHOF was selling at a 38% discount to CRLBF.
I've being dense I guess and I did get a D- in Algebra 3 50 years ago in H.S., But how can base it on PPSx.703 when it should be shares x .703?
I'll try to explain it to you by giving you an example.
If CRLBF is trading at $6.40 and we know the conversion rate is .703.
So, $6.40 x .703 = $4.50
If ORHOF is trading at $3.26, the difference is $1.24 ($6.50 - $3.26)
1.24/3.26 = 38%
Here's my current math:
Stuart Here's my current math 6,352@$3.22 = $20,463.44
6352 x .7031 = 4466 shares
4,466 x $6.25 = $27,913.07
Premium $27,913 - $20,463 = $7,450.
Is there a fast way to calculate the difference between the projected conversion rate to the current PPS of CRLBF and ORHOF? I can figure the money difference for me personally, but a person on another board says it's currently 38%. I've asked him how he calculated it, but have not heard back yet.
Helps if I read the 3q results. I needed to be in the stock by November 25, 2019 in order to vote on the buyout:
"Origin House has set November 25, 2019 as the record date for the determination of shareholders entitled to receive notice of and to vote at the Meeting."
Oh well, I'm all for it.
Cresco has another $50M laying around the house. Voting yes is a no brainer. Having another 50 million dollars laying around is always nice.
https://finance.yahoo.com/m/6cefe334-9875-3e76-8efc-c89924f1850a/cresco-labs-raises-%2450-mln.html
Oops - By accidentally repeating charts 1 and 2 in that post, I can see that it almost certainly caused some confusion....
Actually meant to say this :
And look !.....Because that is exactly what occurred ! (13 sessions later).....
Leaving this question for one to now ask :
Could now it just simply perhaps just Clonk out ?
Or will it continue to climb ?
Well.....
For the answer to that we will have to stay tuned.....
As the next couple weeks here unfold.
I knew one of the charts would display one of your classic "Clonks"...ha
The Great Re-visitation of the 360 Level.....
And that is precisely exactly what happened ;
Leaving the question for now to be asked "Will it just simply now merely Clonk out" ?
Or will it continue to climb ?
Well.....
For the answer to that we will have to stay tuned.....
As the next couple weeks here unfold.
Wow, what a long strange trip it's been. Back in April I had 5500 shares. Here's one of the transactions:
"04/03/2019 09:35:35 Bought 1000 ORHOF @ 8.987". That's when the conversion rate was at .84+ shares. Since then I've made some poor choices and lost a bunch. Now I have 6k@$3.01. I think I stand a darn good chance of getting my money back.
That seems like a darn smart thing to do in spite of maybe hurting Origin's PPS for a little while. It's a big plus for encouraging the merger from ORHOF side of things. If it fails at least ORHOF has more money.
in essence, having ORHOF agree to do a raise before the merger is complete allows CRLBF to buy ORHOF, in part, using ORHOF's own cash.
I agree - this will be a top tier company, and buying ORHOF shares before the merger offers a low cost entry. I too am surprised that there continues to be a steep discount even after they adjusted the exchange ration **AND** ORHOF did a raise (that cash will go right into CRLBF).
yes - that would be an available option once the merger is finally approved. I guess you could do it before final approval if you really wanted. It is a little stickier due to the fractional number of CRLBF shares I would be receiving, but I imagine it could be done.
You could short the box to lock in arbitrage profits. Once you are sure to get the Cresco shares.
No, I wasn't out for just the arbitrage tho that that is a factor. I'm just amazed that the spread is so big with such a good chance it will actually close. This company should be in the top tier once everything settles. Especially once CA realizes they are just helping the black market with the high taxes. Then again, that may be asking too much.
right - if your premise is to use ORHOF to establish a good long term entry point in CRLBF, the temporary lack of liquidity is not a problem. On the other hand, if you were trying to trade the arbitrage, it could be.
Makes a lot of sense. Guess I'm use to the idea of a cash buyout. In any case it's ok by me if it takes a while..
right - part of the reason for that discount is the period of illiquidity that there will be for ORHOF holders who hold to the very end and exchange their shares.
This is less of a problem in a cash buyout, but there is a lot of back office work to to in a share for share exchange. Much of this is computerized, of course, but the process and reviews take time.
Thanks Greenwillow - didn't realize that.
Potentially, but the transfer of shares from OH to CL could be weeks or 30+ days.
OH halted, while CL trades freely.
Could drag it higher or lower, but you'll only be able to trade CL during the transfer period.
Something to assess / be aware of.
GLTA
GW
I use to do this back when it was .84+, but thought I'd do it with the new .7 share for CRLBF. 5k ORHOF x $3.20 = $16,000. 5000 x .7 = 3500 = 3500 shares CRLBF. 3500 x $5.68 = $19,880. If converted today that would give me a profit of $3,880. I've always thought CRLBF would go lower to get rid of the premium, but now it looks like CRLBF will drag ORHOF higher. Yes/No?
Origin House/Cresco labs merger voting has started. Last day to vote is December 26th. I received notice and information circular from my broker and voted this morning on-line.
A smart move, and you even avoid the wash rule.
Yeah, I just converted my 2k CRLBF to 3.5k ORHOF. Now with 5k ORHOF@$2.94. Now to wait till Jan. 2020.
Nice! Wish I had better insights like you!
Good for you, good luck.
Thanks. I can't see them revising it again. Does anyone think CRLBF would back out what with CA making things more unfriendly with the taxes? I was in both back when things were more frothy, but got out some time ago so I'm trying to catch up. Seemed like now was a good time to buy low even if it goes a little lower. Back in at $2.94.
Anyone's guess when the .7 deal with CRLBF will close?
glad I shorted this pig with lipstick
Followers
|
46
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
1951
|
Created
|
02/21/17
|
Type
|
Free
|
Moderators |
HOW WE MAKE OUR INVESTMENTS
Many factors affect the royalty rate. The most common ones include exclusivity of rights, availability of alternatives, risks involved, market demand structure, sustainability of technologies involved, and the level of innovation the product or service provides.
Origin House (CSE:OH), which owns a portfolio of cannabis brands, growers and distributors, announced last week it had acquired 180 Smoke, its 420 Wellness subsidiary and its 26 retail locations [...]
Even though it began as an investment company, CannaRoyalty (NASDAQOTH:CNNRF) is a small-cap ancillary pot player that could become a buyout candidate
CannaRoyalty said it purchase 180 Smoke for C$25 million, and an additional C$15 million when it completes certain targets by Dec. 31, 2020
But which is the better marijuana stock right now? I think the nod goes to CannaRoyalty for one key reason: valuation.
The investments made by CannaRoyalty and Trichome and the strategic counsel both management teams have provided over the past seven months, have enabled us to begin aggressively expanding our [...]
Published: Apr 1, 2019 8:57 a.m. ET
Cresco Labs Inc. CRLBF, announced Monday a deal to buy Origin House, the registered business name for Canada-based CannaRoyalty Corp. ORHOF, in a deal valued at C$1.1 billion, or the equivalent of $823.5 million. Under terms of the deal, Cresco will exchange 0.8428 subordinate voting shares of Cresco for each Origin House share outstanding. Based on Friday's closing prices for the U.S.-listed shares, that would value Origin House shares at about $9.48 each, or a 4.9% premium. The deal, which Cresco said is the "largest public company acquisition in the history of the U.S. cannabis industry," is expected to be completed by the end of June. "Following the closing of this acquisition, Cresco brands will be in over 725 dispensaries across the country, giving us the largest and most strategic distribution footprint of any cannabis company in the United States," said Cresco Chief Executive Charlie Bachtell. Cresco's U.S.-listed stock has run up 67% year to date and Origin House's U.S. shares have soared 90%, while the ETFMG Alternative Harvest ETF MJ, +0.71%has climbed 46% and the S&P 500 SPX, +1.16% has gained 13%.
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |