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MJNA isn't selling THC based products: your expected average legalized MJ consumer isn't looking for medicinal qualities: they'll want to get high and only MJ will provide that, not cannabinoids. MJNA has to risk federal smack down to enter that market and not until its de-scheduled will a publicly traded company go near that for public consumption.
I'm all for estimating future growth, but only in current terms: ie P/E ratios measuring the current hype. Stock market prices do NOT normally account for revenues 4 years from now, especially when there is huge regulatory risks.
I'm long, I'm not a hater, I'm just asking people to justify their speculative numbers, what are they assuming will or will not happen in the near term.
The breakdown of sales projections was a great attempt at estimating future revenues, however it is flawed. That's the entire market, who's to say MJNA will have even 30% or less?
I applaud the effort but disagree with its astronomical projections for 1-2 year growth. We all know full legal will take through the end of 2013 to get started and there will be plenty of competitors jumping in with the barriers to entry being moderately low, and prices will drop as companies fight on price: think Dell vs Gateway vs HP in the early to mid 90s.
If you want to talk full legal, we're talking mass market swill like Budweiser, which the market leaders always turn into: quantity over quality. Smaller companies will enter (Sam Adams for example) to take up the smaller market share the represents the niche demands, and that's where the high prices come in: think Apple vs Dell (computers only).
Now, back to reality. We're talking price, which is a real time and recent history facts, with near term factors only accounting for hype (not to be considered negative, could replace with 'enthusiasm'), and long term factors only accounting for individuals needs for how to strategize their position and portfolios.
I'm talking about the cost of one edible: that calculation assumed a daily purchase by one customer and I was refuting the assumed gross revenues. I took it too far for mentioning dirt, but one MMJ brownie does not cost $40, one drink does not cost $40.
My analysis isn't digging into retail pricing, its looking at annual ytd revenues and offering a valuation based on acceptable measures.
And that highly concentrated bottle only lasts one day?
I said decent not good :). And perhaps black market not dispensary pricing
Look at the past 2 quarters... Valuation is based on previous year revenues. I have them the benefit of the doubt.
Pure valuation.
Now, if you want to take hype and potential growth we start looking at the P/E multiples. LinkedIn which is the hottest stock in the emerging social network is 100.3 as of 15 minutes ago.
A very stable company like Google and Boeing tend to be in the 12-16 range.
MJNA has too many regulatory risks to overcome, a P/E of 30 would be a significant amount of hype.
Wow, you thought this out.
However you lack supply chain understanding. The markups and taxes at each level of distribution eat away those numbers so fast.
Are edibles with cannabinoids really $40 a unit?! An ounce of decent MJ maybe in that range.
Not without buy backs or reverse splits: $100 implies an approx $60B valuation... That would require a monopoly in all 50 states having MMJ or extreme international growth. Full legalization will invite serious big hitters to enter the market and competition will suck market share away.
I'm long, but I'm not 30 years long.
$3M would be nice, except a fair valuation of a company is 5-7x the annual revenues.
Assume $3Mx4 quarters = 12M annually, that puts us at 60-84M range. That's only 10.03¢ to 14.04¢... That's not blue sky values.
.50-$1 in one year? without a buyback or reverse split you're just pumping.
Stop guessing: show your numbers? What are the revenue/earnings goals to justify this? What about P/E, what multiple of excitement/hype are you assuming?!
That means nothing: just that they are operating as such. Says nothing.
I'm still in, still long, reloaded on te way down but I'm starting to dislike the taste of my shoe.
Still long, still like the company, looking forward to Q3, hope they don't over spend on marketing and diminish earnings.
Hope they actually release Q3 earnings and this isn't just a bunch of rumored hype.
Anybody have proof they plan on releasing this week? I'd like to believe it.
I hope the release financials... I can calculate an approx PPS based in earnings, and need to revaluate my strategy.
No... Just trying to wash he taste out of my foot my mouth... I haven't sold... Still long... But don't have much more downside.
No.
They don't have to.
No penalties.
OTC is unregulated. Unfortunately.
I love reverse splits! The uneducated, emotional or impulsive buyer will see the price jump and start buying.. Can definitely expect a small bump from the amateurs.
I hope that's all that happens, without a buy back! A combination of both could signal acquisition since it makes it easy to reduce liquidity and volume!
Yes and no. By decreasing the # of shares outstanding they could drive the price up by pure math... That might also drive speculation and a public feeding frenzy.
However, my concern doesn't relate to buy back for the sake of increasing PPS, I'm concerned about acquisition.
If the board agrees to an acquisition, the OTC shares can be bought and they could effectively eliminate market liquidity (very low volume) keeping shareholders from seeing a good return until the sell where the agreed upon price is all we'll see from the deal, not the expected market price... Especially if they have 51% or more.
See Liquidity of Stocks:
http://smallbusiness.chron.com/happens-shareholder-pink-company-bought-25154.html
A buy back could be a precursor to a buyout/acquisition, and as I previously posted, that could be VERY BAD NEWS for us OTC shareholders as they don't have to offer us anything, OTC is unregulated.
Scary times, I want to go as long as possible, but as I learn more about OTC I'm losing faith. I'm terrified of a buyout before prices go back up and I can ensure my averaged investment is break even at least.
I'm waiting for Q3 to do my own analysis. Even then I have to estimate how much hype to allow for in the P/E valuation of a PPS strategy.
It's going to be difficult giving the unstable nature of emerging markets.
I'm thinking my estimation will have to be conservative (no LinkedIn level hype), that if the price exceeds my threshold i'll sell.
http://smallbusiness.chron.com/happens-shareholder-pink-company-bought-25154.html
If they're doing this then a buyout could be occurring: as well, the buyout may mean NOTHING to OTC shareholders and we could all get screwed if they wanted: there is no regulation on OTC like there is in NYSE or NASDAQ... There is a lot of potential but now there's a ton of risk.
3-4 in gross revenue? Where do you get this? What are their cost of goods sold.
What are their operating margins to help us possibly determine earnings?
3-4 with 50% cost of goods means valuation of approx 36-48M using a rough 6x revenue estimate.
That revenue means the stock price could drop to 9¢ range, assuming costs are only 50%.
When considering P/E, we'd need to evaluate earnings. To justify a 30:1, the profit margin would need to be 12.5% to justify current PPS at 11.3¢. That's at 30:1, which is not unreasonable for a company in a hot emerging market.
25% could see 22¢ at 30:1.
Lots of assumptions based on assumed values. This crap has got to stop and we should just WAIT until Thursday and hope they release a proper statement.
So ill wager it was pulled before close.
Lol... Sorry. $11 would be nice, lol! Maybe in 2-3 years.
Wow, those 250K got eaten or cancelled? That held the price lower earlier, I wonder if its just the technicals keeping it suppressed?
On a limit, those shares only go at that price, and since there is so many of them it would take a long time to get trough them when the bid is lower, and the prices doesn't go up and traders are forced to sell at lower and lower values because the ceiling is sitting there.
I'd like to know the quantity of shares sold at .115 over the last 2-3 hours. That might help is determine if the huge position was cancelled or sold.
Technicals don't take into account trades that are not made, and by dumping a huge quantity then canceling what's left, the impact may still hang over the rules they play by when market forces would have changed their data had the huge ceiling not been placed to begin with.
Who has L2? How many shares are creating that ceiling at .115? Dump a huge position (relative to average trade) and without extremely high demand, it won't be sold off: everybody else trying to make some pennies will sell for the bid and the ceiling will stay intact as all the buyers take whatever they can get for below ask. It's either a really stupid move preventing your own sale, or its pure manipulation, costing you a little to keep the price down until people get more and more weary and sell for less as you buy it up. If I had $250k I could do this too with low value penny stocks.
There is a lot of money to be made In day to day technical trading by pulling small % each day. But I have a full time corporate job and can't watch the level 2s all day long... So I'm losing $100-300 daily I'm sure, which could be used to increase my position further and increase my daily take... But I would get fired if I tried to do that.
A parable by NavyMSU.
During a hiking trip, I stubbed my toe upon a rock in the ground. Injured, I looked down and saw through the dirt and leaves something shine. I picked it up, wiped it off and it looked like gold, so I placed in my pocket, willing to haul that heavy stone with me my entire trip, because 'what if'.
It could be fools gold, but for such a small position, I'm willing to carry that heavy item, risking further injury, dehydration and exhaustion, because what if its not?!
.37 is absolutely doable with the right Q3 report, but technicals look into the past to determine the future and that has significant flaws in its theory. It's anecdotal at best.
I believe it was the podcast interview with MJNA CEO earlier this week, he said their working the audit and talking NASDAQ. Not that they will get up listed after audit, but that they are trying their damnedest!
Which tells me they have the right objectivity and strategy and that they have good managerial leadership which is critical.
There are lots of small MMJ companies that are being run by very professional people: the pot head types will get run out of business, just like how bookworms who own small bookstores are getting their lunches eaten by the big book stores and electronic books (Amazon/iTunes: ePub, mobi, etc).
OH YEAH!!! $MJNA $42.0!!! BUY BUY BUY!!! TELL EVERYBODY YOU KNOW!!
Lol, I'm eager for Q3 to tell me if I'm positioned well at an averaged buy-in of 12.4 @ 40k (I only found out about this company from a friend last week, first buy was on 1 Nov).
As such, I'm still a free member here and am probably about to run out of my daily allowance of posts... So if I get quiet, that's why :).
Gee.. Given that this company is currently in discussions with NASDAQ about being up listed, I think my attitude is just fine.
I did not say the technicals don't work for pennies, because its much easier to buy a position and get involved and that usually means less educated players who are more susceptible to emotional trading causing more significant swings.
I'm a NASDAQ/NYSE kind of guy, and this company is moving in that direction.
Lol! I'm new to trading, got a small amount of company stock awarded to me so I opened an brokerage account, sold it and started playing with it.
I have my MBA, but I do not work in finance*: I'm just using some basic analysis to justify my long interest.
Hopefully the 3Q statement will be properly formatted and I can crunch some real data, and when those reports are audited I'll be much more arrogant :).
*I am not a financial advisor and my analysis is my own opinion, shared for the sake of community spirit and discussion stimulation.
You're looking at near term technicals which have no value in analyzing a stock for long term. There is no analysis of the market or operations of the company, nor any risk mitigation assumptions in your price. $.37 assumes a market valuation of 200M! Gonna need an insanely great quarter to justify that. Assume P/E of 20, need a quarterly earnings of $2.5M.
Of course rampant speculation can drive the P/E higher.
That would mean a $6.6B valuation.
Be realistic. Lets talk about PPS within this century (adjusting for inflation)
Buyout probabilities:
< 1 year : low-medium, they'll want to make sure the companies that make up MJNA are operating effectively: they won't buy a poorly management company when there are many small privately owned companies competing for the market share.
What'll happen? The big boys may try to suppress the prices so when they make the offer they'll get a good deal. In that case, we're all effed for the most part: out shares will be forcibly sold at the agreed price and we'll have no more upside.
Unless:
1) they buy a majority stake, and MJNA doesn't get absorbed and it stays trading on the market and we can gain value in knowing the big boys will protect the company and not let poor management cause problems (assuming poor management exists)
2) we're offered a stock swap, then we'll have shares in a much larger company that won't have as much % growth potential because other mature markets they're in will not grow as fast.
3) if words gets leaked and the price skyrockets unreasonably just to get some action before the offer is made. I.e the company could offer .$75 PPS, that's it, no more growth for us. If it leaks, could see it rise to $1 but that could cause some butt-hurt and the company may wait to see if the price comes back down.
If 2 or 3 happens, we're out if the MJNA business and will take whatever they give us. We may have an option to vote, but I doubt we have a large enough % to stop any offers.
Using mathematical models and clearly defined assumptions and constraints, please provide your analysis on what you expect prices to skyrocket to?
Oh, I doubt we'll get there. I'll need that vacation money within a year or so.. And I don't think my meager 40k shares will grow so high we're set for life. I'm nowhere near retirement age.
I'm realistic in my long. Maybe we'll see $.50-.75 in a year. At 600M shares outstanding, we'll have to see insane growth in earnings to justify that.
Lets say 20:1 P/E (we know that emerging market stocks can have a much higher ratio), for a share price of .50 ($300M Mktcap/valuation) we'll need to see 15M profit annually, 3.75M quarterly.
That's not far fetched, but this company is not near that yet. In a year it's possible.
To grow requires more manufacturing capabilities which requires capital expenditures which means operating costs and lower earnings.
For a 20:1 P/E based on 6x revenues (not profit), they'd need 50M annual revenue to be at $.50.
I'm long, but lets not all get hyper crazy about this: doubling or tripling this PPS is possible in the near year, but there are some large operational obstacles to overcome.
A manufacturing company cannot simply double its production overnight unless its operating at below break even now. Too rapid of growth can crush a company's ability to perform while it tries to meet demand. They need to quickly strategize how much to reinvest and grow without over investing in manufacturing so as to avoid over saturating the market with their product or losing operating margin to excessive manufacturing capabilities. As well, they need to grow fast enough to sustain market share. It's a double edged sword.
I like this company so far, I like the emerging market, but this company is not a SW firm that can grow sales and production overnight by simply buying more bandwidth to allow more downloads on their servers: they can't grow plants to increase yield overnight.
I doubled my position today.. Still small in comparison to many, but I did it at the risk of infuriating the finance Committee (Mrs NavyMSU wanted our vacation fund stored in a fortune 50 company for stability, but we're not planning a vacation anytime soon so I can go long).
Please,
Slap That Ask
Thank you.
Clearing out those 200k shares will help upward momentum.
Explain?
Easy: it's a penny stock and players can get more action for their money.
Why we stay (I'm sick of the pumpers, it is annoying, however the projections look amazing ):
-MJNA will show growth at Q3.
-They are working the auditing process right now.
-They are in discussions with NASDAQ to get up'd.
-They are a very well integrated company, poised to support this industry at many levels, including actual retail products.
Yes, please sell and leave. I can't afford any more shares, but many of my well healed board colleagues will be happy to take your shares off your hand. Go back to the promoters and minute by minute technical trading. Most of us here are long because we see the bigger picture... We see social and economic opportunities and go long.
MJNA does not produce anything with THC (hallucinogen) and is not illegal. The brand awareness and expanding markets will drive demand and revenues. However, if it were truly legal, I'm willing to bet they're ready for it.
So can anybody give us a synopsis of what he's saying?
Yes we are :). I'm sensitive because I've done some market analysis and strategic analysis, considering risks such as federal crackdown, and I see MJNA gaining brand recognition and market share on the shelves of MMJ dispensaries and the full legal states offers opportunities for compounded growth that MJNA is not even counting on. Sure they are aware of the expected benefits, but they are not focusing on that market (yet, we all know its a regulatory strategy to stay as far away from it publicly and just shrug when there is unplanned growth in the new demographics.)