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ACB currently has a $2.7 Billion Market Cap.
51% of 2.7 Billion is $1.337 Billion.
I really think Canopy is missing-out on a HUGE Opportunity here.
Canopy has $2.7 Billion in CASH.
So Canopy should just spend $1.377 Billion and BUY CONTROLLING INTEREST in ACB.
ACB shareholders will be happy that they are getting $2.60 for their shares and Canopy will be the #1 Cannabis Company in the World for only $1.377 Billion.
CASH is KING.
Canopy can pay CASH for Aurora.
But ask yourself - Can Aurora buy Canopy for CASH?
If Coke would have bought-out Pepsi in the early days of Soda - the Soda Wars of the 1980's would have never happened.
I'm thinking "Relief Rally" in the Canadian Cannabis Sector.
This whole sector has gone steadily down since March. So there was bound to be a break somewhere. I mean, not all Cannabis Companies are worthless.
But, beware. The shorts are still out there waiting like wolves.
And the fact that Ontario announced a lot of new Retail Store Licenses is one thing. But getting the new stores up and running and making $$$$ is another.
IMO. Picking the correct Entry and Exit Points is going to be key here.
Cannabis Stocks can go up very fast. Just look at Medmen over the past few days. It can happen.
I don't know about institutional holdings increasing - but there is no doubt that ACB (and the whole sector) has been in a tall-spin since March.
I mean, just look at the graphs.
But in once sense - it seems like we have an inverse relationship going here.
I mean, if the Big Institutions have been BUYING since March - then why have the Canadian Cannabis Companies declined 75-80% during the same time period.
Usually, when the Big Institutions are BUYING - the SP goes up (not down).
We are going to be dealing with the same issues here in Illinois.
The process here in Illinois is super political.
For Example: Cresco Labs was trying to open 1 retail store in Chicago and the seven Alderman had to approve it. They asked what percentage of Cresco was minority owned (like that really matters) - but Cresco responded that they are a Publicly Held Company and that anyone is free to buy their stock.
So we're dealing with A LOT of that here. Everyone wants their piece of the Cannabis Pie in Chicago.
But I think they are starting with less than 20 Retail Store Licenses in Illinois for 12,000,000 people - so the Government are idiots.
Yep!! This is a great catalyst.
This news should move the whole Canadian Cannabis Sector much higher.
I just always wonder about the timing of this stuff though.
I mean, why couldn't Ontario announce this before the entire sector lost 75-80% of it's value?
Maybe the short sellers put a hold on this press release? LOL!!
I agree. There will be a point where the LARGE SCALE Black Market will disappear.
However, there will always be a neighborhood home grower that grows too much (believe me, it is easy to grow too much) and they will share with their friends.
But the Black Market might still exist in remote locations in Canada where the population is less dense. But that is not the market the Big Canadian Cannabis Companies want anyway.
You might be a bit aggressive regarding how long it will take the Black Market to decline - but opening 500 new Retail Stores in Ontario is surely a great start.
New Cannabis Customers will always trust a "Real" Store over the Black Market anyway.
The Black Market existed because Cannabis was Illegal. But now that Cannabis is Legal - the Black Market will eventually disappear (just like it did for Alcohol in America in 1934).
The news that Ontario is allowing 500 Retail Cannabis Stores is very Bullish.
Actually, that was the type of REAL News I've been waiting for.
There are hurdles in every new Industry - but not being able to sell your perishable product is a real problem when you are a growth company.
But it sounds like Ontario realizes the problem and are open to fixing it.
Not all Governments are open to fixing these types of problems -so it's not a no brainer.
But I think the whole Canadian Cannabis Sector will go higher from here.
IMO.
Now that is the news we all have been waiting for!!!
Finally there is a REAL Catalyst to move the Canadian Cannabis Stocks upwards.
ACB can grow all the Cannabis they want - but if there isn't enough stores to sell it in - it is a non-starter.
But it sounds like that problem is finally being solved!!
Thanks for sharing the article!!
I have no idea what you are talking about.
What piece exactly was a citing as fluff?
I was just making a general comment on the Seeking Alpha Articles.
For every positive Seeking Alpha Article - there is also a negative one. So it is fluff.
But I do agree that the big investors do their own analysis of the Financial Statememts - that is the reason why there was such a huge sell-off since March.
Good article! Thanks for sharing!!
Yep. The last 9 months have been a blood bath for the Cannabis Industry.
However, everyone still knows that there is MONEY $$$$ to be made in this industry.
The fun part is: Figuring-Out who is making the Money $$$$.
Somewhere out there: There is a Cannabis Bill Gates or Sam Walton.
We just have to find them.
Yep. The need for a STRONG BALANCE SHEET was one of the topics the Cannabis Industry was discussing at the Las Vegas Conference.
CASH gives you flexibility to weather storms (that management may or may not see coming) and it also allows you to pounce on opportunities as they arise.
That said, Constellation pumped $4 Billion into Canopy. But I am not sure if they management at Constellation knows what it is doing either. I just hope they don't "pull the plug" on their Canopy Investment the way they did with Ballast Point.
Constellation took a $900 Million Write-Off on it's Ballast Point Acquisition. If they ever write-off their Canopy Acquisition for a loss - that would be bad for ALL of the Cannabis Stocks (including ACB).
https://seekingalpha.com/article/4312214-constellation-dumps-ballast-point-for-nearly-900-million-loss?dr=1&utm_medium=email&utm_source=seeking_alpha
"Hostile Take-Overs" usually means that the Acquiring Company will pay a premium for outstanding shares in order to gain control of the Company via the open market.
So how is that bad for shareholders?
The Cannabis Industry overall lost $49 Billion in Market Cap since March.
That is a staggering amount of lost Market Cap.
Maybe the Cannabis Industry was way overvalued? Or maybe the sell-off has gone too far? Or maybe a little bit of both?
Or maybe $49 Billion was not enough. Maybe this is still going on and the sell-off is going to be more like $60 Billion.
Who knows.
But it does open up opportunities to buy Financially Strong Cannabis Companies that can weather the storms without further dilution.
Nope. Not at all.
Instead, consider me a "Hype Monitor".
It doesn't take much for this board to go into "Hype Mode" - especially when NOTHING HAS CHANGED.
For example: Look at the graph since March. Do you see any major up-ticks? Or does it slope down and to the right steadily?
But just give this board 2 Green Days in a row and they'll be screaming "ACB is going to $20!!!" in no time flat.
Actually, I made money on ACB due to my complete LACK OF PATIENCE.
"Patience" works great when you have a stock with a 7% Dividend Yield and you reinvest the dividends. Just sit back and be patient and make money.
"Patience" does not work well in a new industry and everyone is speculating. The investors that bought ACB at $10 and were "patient" - are looking at about a 80% loss of principle right now.
Now it is time for Seeking Alpha and the rest of the Investment Rags to start writing articles on how great Aurora is and how ACB has no where to go but up from here.
These are all just opinion pieces and fluff.
I'm sure Warren Buffet spends his days reading Seeking Alpha Articles (not).
Real investors read the Financial Statements and analyze the data and then draw common sense conclusions based on what they have analyzed.
For example: Aurora's Sales were down from quarter-to-quarter in the latest ER. This fact alone is not a good sign for a growth company.
Cam and Terry can blame the "slow rollout" by Health Canada all they want - but this is Cam & Terry's daily business - so shouldn't they have known about the slow rollout and planned accordingly?
Or is that too much for ACB shareholders to ask?
Personally, I think Aurora should fully know the Foreign Requirements for doing business in the 25 countries they are planning on doing business in in the future. They should eat-sleep-and-drink these requirements.
Oh Gee!! We forgot to get a license in Germany. Oh Well. Our bad!!
ACB's Management moves are costing ACB Shareholder's money everyday - and stupidity does not usually cure itself.
If you look at the graphs of ALL of the big Cannabis Stocks in 2019 - the pattern is almost the same for all of them.
Nice run-up early in the year - followed by a HUGE sell-off starting in March.
Retail Investors (aka: the people posting on this board) seem to think that there is a human being on the other end pushing the "Buy" and "Sell" Buttons that move the stock's direction.
But in reality, it is COMPUTERIZED TRADING that is moving this whole sector up and down. It is all Algorithm based and it treats all Cannabis Companies about the same. That is why they all move together.
But what a COMPUTER cant see is: There are people waiting in lines in Michigan and soon they will be waiting in lines in Chicago for Legal Cannabis. In Illinois, Cresco Labs and Green Thumb are the major players (but do your own DD).
And lets hope the COMPUTERS change their minds about Cannabis Stocks in 2020!! LOL!!
Would you say that Legalization plus the SLOW ROLL-OUT of Recreational Store Licenses by Health Canada is helping the Black-Market? Or hurting it?
I mean if Cannabis is legal and there are not enough stores open in Ontario to meet the demand - isn't the Black Market currently filling the gap?
Are you saying that the LP's are taking business away from the Black-Market? If so, that is great news!
My point is a simple one (so I will say it a different way) - IF Police and Revenue Canada do not crack-down and arrest the Canadian Black-Market Dealers - then the Canadian Black Market will continue. What is there to stop them?
IMO, Cam has been silenced because of the lawsuits that were filed.
When you are in a hole - a good attorney's first advice to his/her clients should be to stop digging deeper.
So I think the days of Cam prancing around on Aurora YouTube Videos is over (at least for now).
Yep. They are seeing a lot of "pop-up" Cannabis Shops in California also.
It reminds me of "Farmers Markets" or road side produce stands.
They are hard to catch because they are mobile (often working out of small vans).
But they have a crop to sell - so they are taking the risk.
But "the risk" is not as nearly as bad as when Cannabis was an illegal substance. You would have never seen "pop-up" Pot Shops when Cannabis was Illegal.
Back when Cannabis was illegal - it was a serious offense for trafficking in a Controlled Substance.
But now that Cannabis is legal - the offense is selling produce without a permit.
Not nearly as bad.
Yep. There is an argument that all Canada did was legalize the Black-Market.
Without Police and Revenue Canada Crack-Downs on illegal growers - there is nothing stopping the growth of the Black-Market.
So it appears that White Men Can Jump after all!!
So far, the Cannabis Industry reminds me a lot of the early days in the Airline Industry back in the 1950's.
In 1950 - EVERYONE knew that Air Travel was going to be the future.
However, A LOT of companies tried to capitalize on Air Travel and they ended-up BK.
You would think that investing in Air Travel in 1950 would be a slam-dunk money maker - but it wasn't. Not by a long shot.
It turns-out that there were a lot of hurdles to overcome in Air Travel and A LOT of Government Red Tape (sound familiar?) and even the big boys like PamAm paid the price.
Not all Cannabis Companies will make it long-term. The key is to find the Cannabis Companies that are best positioned financially to weather the storms (like Canopy).
Yep. I read an article where Willi Nelson and Woodie Harrelson were playing Poker together and Woodie started smoking again.
And Willi's response was: "Welcome Home Brother".
Very True.
Willi has been a pied-pipper of Cannabis for centuries (even back when Cannabis was EVIL).
God Bless Willi for standing-up for what he thought was right. Because he was.
Yep. Kilos, THC Drinks, Edibles, and everything else related to Cannabis.
Right now, you can't smoke Cannabis and consume Alcohol in the same establishment in Europe. But they can be right next door to each other.
So in Amsterdam - you just have a Jenever in the bar and then walk next door to the Coffee Shop for a smoke. Then go back to the bar.
Looks like the Market likes Canopy's new CEO. CGC is up 13% this morning.
Constellation is going to use their historical/ancient Liquor Business Contacts to expand Cannabis through-out the world.
Want to place an order for 12 cases of Scotch for your bar? How about adding a couple of Kilos of Canopy Cannabis to your order as well? Thank you for shopping at Constellation Brands...
Same Person? LOL!!
Or maybe Morgan Freeman did?
Yep. And Apple just invented new an innovative products and their stock price went way up. The Iphone, the Ipad, the Ipod, etc.
But Aurora isn't inventing Cannabis. God invented Cannabis.
Do you mean trend higher? Or trend lower? I am confused.
But the part about never seeing $5 again might be correct.
Just go back and read your posts. You haven't been right yet.
And I bet your screen says the same thing.
Just so we are on the same page:
RED = You're Wrong.
GREEN = You're Right.
Nah MX - I think I will sell it all at $6.60 instead.
Thanks for the advice though.
Looks like $9/Share to me. But maybe my memory is wrong.
If you are looking for links about ACB's Cash Burn - Here are a few.
Companies don't go BK because of lack of profit - they go BK from lack of cash.
https://investorplace.com/2019/11/aurora-cannabis-stock-faces-a-cold-winter-rapid-cash-burn/
https://investorplace.com/2019/10/aurora-cannabis-stock-momentum-clouded-by-prolonged-cash-burn/
https://www.fool.com/investing/2019/11/27/will-aurora-run-out-of-money.aspx
https://www.msn.com/en-us/money/topstocks/aurora-cannabis-stock-has-a-cash-burn-problem/ar-AAEH54Y
https://stocknews.com/news/acb-aurora-cannabis-inc-acb-cash-burn-causes-concerns-bofa-downgrades/
https://seekingalpha.com/article/4309018-aurora-cannabis-be-in-financial-distress
There are A LOT more links on the internet. Just type in "ACB Cash Burn".
But MSN and Merrill must not know anything though.
Yep. The long-longs must think that losing money is funny. That must be the reason why they are laughing as their stock loses over 50% of its value in just 3 months.
When a stock loses 50% of it's value - it just has to go up 100% to get it back.
I've seen Companies like this before. If this downward momentum continues, they will do a Reverse Split and the shorts will take it down even further.
Like I said. I am not going to argue with a long-long. There is no benefit to it.
If you think a $50 price target is logical - then it is.
Or if you think that ACB is going to $9 by year-end - then it is.
The rest of the world has been watching ACB tick-down steadily from $10 to $2.40 since March.
But if you think it has been ticking up - then it has.
This is non-sense. I am not going to get into a debate with a long-long.
Whatever you believe is correct is okay with me. Hint: The longs can tell when they are correct when they are making MONEY $$$ on ACB and not losing it.
But please do not mislead others into losing money also.
What part don't you believe? The $3 Calls or the $50 Price Target? LOL!!
I have been contradicting the non-sense of the longs since March - and I'm not sure if I should laugh or cry.
Exactly! The Decline from $10 to $2.40 was all manipulation designed to get shares from the weak hands.
I mean, shares of ACB are scarce these days. There are only 1.09 Billion of them outstanding. So I can see why MM's would want to drop the price so they can get the shares from the weak.