Empire Building 101
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This was absolutely the worst of 90% earnings report this Q. in this sector. Almost everyone had a much improved bottom line and we had the worst Q all year. The focus should have been on results and what they will do to improve them. Instead talk about rosey future projections. Sure as heck I am wrong. Many talk about EBITDA but miss the point when your paying lots of monies on interest. Kind of like a car loan at 28% or no interest or low interest. Without an out on the the 12%-15% interest getting to profitably is going to be tough. Hope to be dead wrong but going back to the $1.20 converted shares and then get 12-15% interest is thieving off the shareholders. I honestly think the preferred shares at 8% is fair deal. Guess in another 45 days we will see here where the wind is blowing especially bottom line after EBITDA is factored in. GLTA
PS I believe another good size loss is coming for Q1.
Sales are going to grow nicely but the costs are going to be high as we will get at least $7 mil a year from interest alone which wasn't even a factor in q4. We have $1.2 Mil in cash so dilution or more high interest coming.
Everyone look at the Q4 financials all costs are extremely high and when I said they would take a bunch of write-offs I was given all the hoopla that they could not write off many things. Remember me getting a post with a link explaining I was wrong. Well I then admitted being wrong per the link. Then we come out with expenses higher than revenues and hardly any interest being written off at all. So really what gives?
I may be way off here on my thinking but losses were 400% more than anyone was suspecting as .03 .06 loss was a consensus while Hoop was calling for a profit. Then we have a article stating Star Buds cleared $28 Mil on revenues of $75 Mil. which was so much BS. The fact that real questions were not answered makes me wonder exactly what is in the Kool aide. We have a board member mysteriously disappear which was definitely material info and nada word. Super high operating costs and skated over that.
The savior is safe banking for sure but realistically with the administration was going to change everything and next thing you know 5 people in the White House let go for previously use of marijuana. Lots of questions but no real.
I would be shocked if this goes up tomorrow based on Q4 showing. In fact, I believe sub $1.50 is very possible as the Q4 show was atrocious/ Acquisitions nay be ok but it is becoming a certainty that net income will be very elusive this year and interest expense is going to balloon along with stock based compensation which alone was $2.5 Mil. loss.
For anyone who remembers I originally said they would have a bad q(loss) and was just totally chastised by everyone. People need to realize just how horrible this Q really was. While a huge revenue increase will come the problem is these on going expenses. We may not see $3 again this year IMO. Net income was not mentioned and a lack of any real answers on the cc was obvious concerning.
Unfortunately it widened on the downside.
Hope so as q4 total sucked as losses excelled very disappointed as revenues were marginally better than we and probably down when you consider they had 6 Star Budsfor 10 days. Plus guidance was lowered from 115mil.to 125 mil. To 105 mil. To 125 Mil. WTF and no explanation
While it is possible you have 2 Mil in notes paying an average of 12% which equals 3.2Mi in interest and then you have 17.9 mil preferred at 8% which is another $1.32 Mil and this is only for the last 5 dispensaries. Plus other costs incurred. These 13 dispensaries will be probably net $5 mil for the year. I believe $10 mil for the year gives around .18 year end.
These other operators probably had no debt to the magnitude we have taken on that owned Star Buds.
What are your expectations in lieu of all these costs from the acquisitions Doc?
While I am very optimistic these costs have to be factored in for SHWZ net income this year. I believe $10 is very realistic this year based on a very low P/S but to think this net income will carry-over with no carrying costs is absurd. IMHO, .18 is attainable this year and .45 next year based on another profitable acquisition or two.
I find that net income very unbelievable. Looking at the ones that did show a pro-forma numbers. I believe it is EBITDA and yet another uninformed writer. Hopefully they have that right and then we would truly fly. Heck that is .50 per share net income on 42 mil O/S. with just 13 dispensaries based on 2020 numbers. Not trying to be negative at all as the numbers will get progressively better Q/Q.
Honestly you don't know how bad I hope this guy has it right. But realistically margins topping out at 40% which is realistic is about $20 Mil which would be EBITDA and that excludes interest expense, Taxes, depreciation, and amortization. Not trying to bust anyone's balls but take a good look how much interest is going to take a hit at 8-15% plus taxes.
The only analyst is calling for .10 per share this year which would be $4.2 Mil. IMO, I believe .15-.18 is very possible as I believe again Purplebees is the golden goose going forward.
Good luck to all and hopefully I will have something to share after the CC as we are in the quiet period.
Not really looking for much increase in PPS after earnings maybe $2.50 tops. With that said I am very biased here and have extremely high expectations later this year. Remember we have had some very good earnings reports on MSO's and TCNNF and they all went down. Like many others my bag is full. Look for another 13 D filing soon based on my gut feeling...lol GLTA
My thoughts are a secondary is coming. All the family and shares are held tightly now. By Q2 earnings we should be close to $5. Tnen either a bought deal or secondary. We have the next acquisition announced and absorbed then it hppens unless Safe Act is finanlized.
Surely does not look good to hold $2 tomorrow unless a big buyer shows up s my 500 -1000 share buys aren't going to cut it. IMO, I do not think Joshua is gone as it would certainly be a material event in his position and would require a filing. If he is that would be a red flag but like I said I do not believe it.
It is terrible. Good earnings mean exactly nothing. We have a large seller and he wants out. It is not encouraging at all. I added a few more at $2.05 today. I believe it will take a few months for any positive movement Hopefully I am wrong. Currently not sure we will even hold $2.
Me too. Not a lot another 850 shares. Looks like a little discontentment here today.
Anyone notice nothing mentioned on recent release pf earnings about forecast for 2021. Dye mentioned that on a recent clip. Is anyone else wondering why this wasn't mentioned>
Sure hope this was a mishap as I particularly was/am expecting this update.
Serious downside in this sector lately despite good news. Any thoughts?
I did add 2k today. As I have said not sure even good earnings will help near term but eventually going to be quite an impetus to add for later. Under $2.30 should prove to be a very good buy.
I believe this is what caused some downward pressure in the industry. We are not affected while some such as TCNNF could be.
https://www.cannamd.com/thc-cap-passes-another-fl-house-committee-now-what/
Honestly I believe earnings will be good. However, a few including HEXO and Green Thumb exceeded expectations and the PPS did not react at all. We may have to wait until Q1 is announced which isn't really that bad IMO as it gives me time to accumulate. IMO, .04 loss Q4 and profitable Q1 going forward which is due .45 days after end of month.
That would be good. I believe Purplebees has 50%+ internal growth this year. An acquisition would be frosting on the cake. Edibles and vapes are going to grow much faster than Bud going forward and better margins.
Wasn't really sure. Thanks for the clarification
Not really sure if not filed. Comparing it to a patent unless you file for the patent anyone can steal your idea afterward and patent it if you don't. I may be speaking out of turn as I do frequently(lol) but honestly if you don't register and protect it I believe it is open game. Only my opinion.
PS Maybe buying out the one in Washington would eliminate that problem.
PSS Personally whether if it is Mesa or Star Buds each dispensary will stand on its own. We all believe Star Buds has best practices with well trained budtenders and excellent prices with a stellar reputation. Replicate everything from Star Buds to Mesa and they to will be golden with Mesa name.
I have no problem following the money knowing their interests align with mine. Yes you are right they are talking about themselves but the fact remains whatever their shares are eventually worth so are mine. With their track record I along with the longs here have the faith as this story unfolds and surely it will.
Love the fact that he mentioned shareholders. Today or tomorrow no real idea when we move but given some time surely we are golden.
My bad. I knew and read what you posted but thought they could still right off goodwill. I stand corrected. They can still write off a lot of deductions including some depreciation. No good will. Also some depreciation but not all. Congress needs to get moving on this!
Careful analysis with a cannabis accountant must be done to ensure you’re compiling these deductions while remaining compliant. Here is a suggested list of the types of 280E deductible labor COGS you can leverage:
Cleaning
Trimming
Curing
Packaging
Inventory
Cannabis cultivators may also claim deductions for:
Raw materials and supplies (seeds, clones, fertilizer)
Indirect product costs, such as: equipment maintenance, utilities used to grow cannabis, supervisory wages, and costs of quality control and inspection
As a stand-alone dispensary, COGS are limited to the cost of the product and the costs of acquiring the merchandise, including the transportation costs to purchase the wholesale cannabis. You may also claim deductions for electric bills for designated inventory areas. From that point on, virtually everything else is subject to 280E scrutiny in the retail environment.
Write off's like accelerated depreciated(computers). Especially good will impairments. Don't know where you are coming up with that statement. Anything bought above book value actual value is goodwill and most acquisitions over pay and is categorized as good will. plus inventory can have involve write offs such as obsolete inventory.
goodwill is the established reputation of a business regarded as a quantifiable asset, e.g., as represented by the excess of the price paid at a takeover for a company over its fair market value.
Agree with all you said and excellent post. But I do not believe Q4 earnings will be that good though. As I expect they write anything(write-offs) possible to make this year earnings improvements that much better, I believe a loss of .02 to .04 is in the cards.
However, it is my belief that the growth estimates ,acquisition updates and q1 earnings estimates with possible year end provided will be quite an impetus to give lift off.
PS Hope you are right on q4 earnings but I still expect a loss. In the event q4 is profitable and you are right with new estimates straight to $5 forget $3.25
Been doing a little trading and with a good market been able to continue adding small amounts 100-300 shares. Can't add more old money as I already own way to much of this. My goal is 100K.
Me too. Someone had mentioned calling IR and the response basically was we have a story to tell. Not sure who posted it but definitely remember it.
Both seem well qualified.
Very puzzled at the PPS as we have absolutely no traction with endless selling on the low.
Hope your right but I don't see that. We are going up news related whether acquisitions or earnings and forecasts by management. However, not saying it can't happen. Besides most of the high flyers them go up on hype and hot air with no fundamental backing and not really an investment. I prefer slow and steady adding new investors and not day traders and flippers.
$15 Mil for real estate does not sound feasible or reasonable unless to add capacity and increase manufacturing. IMO, no way to justify that large of an investment for real estate alone. Also IMO, it will be some type of add-on to Purplebee's. Remember they said it was an acquisition.
Dye was very clear about acquiring businesses that are accretive. By that I believe it was meant as profitable and not just a sales increase. I must say I really appreciate this board as obviously everyone here adds value.
Got a gut feeling we get news this week. It was already mentioned going on 2 weeks ago Tuesday about another acquisition which is already funded. Perfect time to drop an update and end speculation to who and when.
Wonder what Dye meant by external methods.
Dye explained the company now plans to incorporate these new locations, “utilizing our proven integration playbook that streamlines the M&A process and drives operational and financial synergies. We are looking forward to growing the Star Buds brand through internal and external methods.”
Albertson's was turned into a $60 Bil company not $600 Mil...jus sayin
Better than I could ever put this in print but 100% my thoughts. Thanks for a well thought out response.
Your response is why I continue to buy as the facts are irrefutable.
Plus all the money Dye has put in himself.
Follow the money!
IMO, consolidation is happening and the pace will quicken. The larger MSO's want a larger footprint and with over $2 Bil sales in Co. and growing nicely(20%+) it is prime real estate. Now you have SHWZ with 17 dispensaries, manufacturing. and cultivation with more acquisitions forthcoming per sec filing. Oh did I mention profitable this year and more than likely q1 this year and definitely q2. This makes so much sense for any MSO wanting to get synergies who have a footprint in surrounding states with an intention of getting economy of scale.
While a buyout is logical it certainly is not a given. We have management owning well over 50% when all considered and contingent on Dye and friends. With the average P/S of 6+ with all companies within our sector a buyout would not come cheap considering by q2 we will in all probability be at a run rate of close to P/S of one (1) compared to multiples much higher and still not profitable.
IMO, we have stayed under the radar because Star Buds was privately owned and no real financials were available. Next all projections are forward looking and no real confirmation although pro-forma numbers are very indicative to expectations. Once Q1 numbers come I believe institutional interest as the PPS is usually $5+.
Last but not least in Fl. there has been 2 acquisitions AYRWF buying LHSIF and now CRLBF closing on BMWLF Q2. While overall with the expectation of legalization in 2022 the market is larger the parallels are very similar.
I have seen fake walls but obviously this wasn't. Just filled bought 3k total today. Holding a boat load.
I don't have the funds required. Maybe Drug Doctor will take them out. Maybe a fake wall for someone to fill.
Just bought a few and have the bid in at $2.43
Doing a bit of trading to raise cash, will put gains into SHWZ as they come.
Exactly what I have been doing unfortunately small gains thus small purchases.
If plan is successful as I and many others do including yourself the buyout comes. Market is huge in Colorado and certainly a MSO wants a part of this market. Of course IMO.
Thanks for the heads up here John. Just got in for 1.5k at $1.39
It was between this and HRVSF flipped a coin...lol
Had surgery 2 days ago and stranded at home healing and the board is dead and I am bored. You are right about low volume and fluctuation of the PPS. Anyone chasing something else may dump at any price and hopefully can snag a few more below $2.45