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As I said this was a crude summation of all cash and all invested capital in the businesses (caliva, LCV and sisu). The shares dipped below 7 and while not tagging that 6.50 I was looking for, I decided to pick up some warrants on the recent weakness. I’d been eyeing them for several months. If warrants dip further toward 1.50 I’ll probably add more.
After seeing multiple posts and analysis floating around message boards using 92M shares outstanding, which directly conflicts with the transaction cap table from the corporate presentation, I reached out to IR for confirmation. Their response is as of the January 15 despac transaction date there are 98.9M shares outstanding. For having such a polished and frankly excellent website it smacks of pure laziness that they are still carrying pre transaction details, which are erroneous, in their current corporate presentation and I’ve let IR know that.
So, with this updated share count I’d peg 6.50 or so as a solid entry point for the stock.
Invested capital plus cash on hand is roughly 640M. A 640M market cap equates to about 6.50.
Doesn’t mean it hits that target or that it doesn’t go lower but that number is a solid current backstop justified by all invested capital in the businesses and current cash available to the business. How they operate going forward and how they spend that cash will of course be the big determining factors on just how solid a floor that area should be. All imo
I now expect the stock to trade toward the mid 5’s. Invested capital plus cash on hand yields about 650M and so that’s the market cap I’m thinking the stock gets to. Crude analysis and a bit random? Maybe. But I watched another despac do exactly that earlier this year, rising post despac and then falling and tagging that exact calculated level: cash plus invested capital. Just an opinion.
Thanks for the link. This brand has so many miles of runway in front of it. I truly believe they could exit 2021 on a 60M run rate on just the Lowell flower and pre rolls.
Agreed. Economies of scale 101. It’s all about unit economics on the upstream side and the “lightening in a bottle” brand on the downstream side. George intends on capitalizing on both. Not arguing any of the bigger picture points here. I find George’s strategy to be quite remarkable thus far. But I also stand by my cautionary posts. The company needs a lot more cash to get this upstream tailwind. Commodity economics in California also need to stay robust or ebitda projections would collapse. The company also needs to prove they can break the cycle of 3 very poorly executed quarters in a row and to stop blaming exogenous and unforeseen event after event. It sets a very bad precedent and eventually operational leadership must be called into question (and yes I mean Mark) if projections continue to be missed. All imo.
George has big big plans but with 25M cash on hand (probably 5M burn in Q1) and the intention to bolt on/build out 1.3M sf of additional cultivation at an estimated cost of 60 to 80M, a significant cash raise appears inevitable. Thus the reason for the 100M shelf prospectus filed in December. A 300M fully diluted share count is looking likely by EOY. If build out and bolt ons are actually completed within 12 to 18 months and the Lowell brand becomes the flower leader in Cali, the 2023 revenue projections will be absolutely monstrous assuming that is that commodity pricing stays strong. All imo
This entire analysis is based on one very crucial mistake. The share structure being used is before George and Geronimo capital took over last year, which proved to be a very dilutive transaction but without George, Rob probably would have bankrupted the company. The person doing this investment write up neglected to review the current cap table from the corporate presentation which shows fully diluted shares approximately around 245M. There are other points from the analysis I disagree with but when an investor overlooks such a key item as current share structure, it’s probably not worth delving deeper into the misguided price target. All imo
Thanks John. The mirror is deep and wide for those of us willing to look. Best to you!
The sad fact is if another investor had pointed out my oversight in posting an incorrect share count on a stock board I would have thanked them for pointing out my misinformation and updated my valuation tool to account for the error. It’s a simple as that. Instead this back and forth has devolved into a truly sad display and testament of the very divisive times where individuals hide behind screens and allow any sense of humility, character and graciousness to wither away, calling people they do not know “rancid’.
LOL I’d refer you back to your original post with the share count and my response with link to the company’s corporate presentation for a reference to the actual pro forma share count. The fact you refuse to take ownership for such a blatantly incorrect posting sadly speaks volumes about you. And that you just say I’m full of BS instead of reviewing the facts speaks even louder.
I responded with the correct share data because you have a tendency to post less than accurate information, which is unhelpful
If you do the warrants just be aware Steve has already mentioned the acceleration clause in a recent interview so as soon as that daily Vwap is triggered the company will be looking to call them in. Probably because they plan to go big into the soon to be legal New York market and they will need that cash.
Put up or shut up. Offer due diligence and fundamental or technical analysis or please move on.
Page 28 corporate presentation
Current Shares out 116.7M
https://s27.q4cdn.com/853048262/files/doc_presentations/2020/12/Dec-2020-SCAC-Presentation.pdf
Well if many others market participants made 1000% last year like you did then we may be much closer to the end of the 1999 scenario. The only time I saw such returns was in 99 before the equity bubble burst in March 2000. I certainly see anecdotal evidence everywhere of speculators being rewarded far more than fundamentals would normally allow. Certainly Understand your capital preservation stance. I gave a lot of my gains back in 2000 near market due to complete lack of valuation analysis. Although frankly if I’d have had any of that understanding I probably would never have bought the stocks in my portfolio, many of which went parabolic! Lol
The momentum got wrung out of the mj sector super fast recently . But as long as the overalll market doesn’t fall apart I’d expect 2H 21 to potentially offer upward momentum on removal of 280E and perhaps the beginnings of a decriminalization framework coming together. Big tobacco and alcohol are part of the group pushing hard to get the Federal government on the same page as the states. Also they want this wrapped up and in place way before the mid term run up so I’m thinking they hash out their differences and get decrim done prior to YE so it can roll out in 22.
Frankly there are so many scenarios that support an upward trajectory for CLVR but the biggest in the medium term, would be US decrim. The market unraveling due to unchecked sky rocketing yields is probably the biggest threat that I can see. All imo
Kyles point about how they’re positioning themselves in regards to German distribution is way ahead of the curve and I’d expect them to continue to employ that distribution moat strategy. I expect any M&A they do to be focused on the distribution side. Its very possible Kyle is positioning this company for a possible pharma buyout in a few years time.
https://www.valuewalk.com/curaleaf-deal-future-cannabis-market-europe/
What about Biden spooked you? Frankly almost every politician is in the back pocket of business and special interests, with just a wink and a nod to s alight platform differential between right and left - they all serve money regardless of what side of the aisle they sit on or the rhetoric that spews from their mouths. Just my opinion.
I’m concerned with the changing macro trends especially the 10 year. The EU has come out aggressively saying they will control the long end of their yield curve to keep interest costs low and its probable our Fed may do the same if our 10 year yield gets much higher. If that happens I expect a full on buying binge in commodities, precious metals and equities as the USD gets pummeled. Equities may run toward a parabolic blow off top. Sheer conjecture at this point but a lot of solid Elliot wave technicians seem to be pointing to that possibility just based on equity index chart setups.
In terms of CLVR if an equity bear market ensues the stock could easily get cut in half because the current valuation premise is based on a projection model yet to be proven out but if the market indeed goes into blow off mode then CLVR could go on very a big run, especially if they begin to prove out the aggressive growth projections, with the caveat being to get out before the music stops. I remember what happened to equities in 2000 and it was absolutely brutal. All imo
IR confirmed Q4 will be released near end of March but aside from adding in the additional Greencare up front 2M prepayment, I don’t expect the rest of the results to be much better than Q3, so I’d imagine we’re looking at a 6M quarterly loss, which should be baked into the share price. What is a bit more significant is that aside from the announcement about clvr importing CBD topicals for their herbal brand company, to distribute, which Kyle has stated is in very early goings at this juncture, CLVR has not reported any additional sales contracts in 2 months (Entourage phytolab was announced Jan 12). My hope is they are partnering with companies who prefer to keep a low profile but without contract news there’s really no way to gauge their success until quarterlies are announced.
Warrants are also in am ascending triangle pattern but they were held down going into the close and did not break to the upside like the commons. With sector and Nasdaq weakness this morning we will have to see if the shorts and general sector weakness leads to invalidating yet another breakout pattern and further weakness ensues. All imo
I forgot about THCX. Per website they hold about 352k shares so not a significant portion of the estimated float.
https://thcxetf.com/fund/thcx-holdings/
The daily short ratio has backed off a bit down to 20% the last few days. I’d be really curious for an accurate amount of current shorts outstanding. The stock broke an ascending triangle yesterday targeting 15 but with the pre market looking awful, shorts may pile back on and invalidate yet another chart breakout. As I said, it’s looking like the shorts are piling on for a sector washout.
For such a low float stock the volume is actually very liquid and even though lately you can clearly see the trade volume has backed off from the daily average as momentum buyers have rotated out or taken the short side, the stock still trades just under a million shares, which is excellent. The Mexico news should have lit a fire under CLVR as it did Khiron, which is up 100% in a week or so. Truly ironic to see a Nasdaq listed stock be more manipulated than a Canadian venture stock!
Anyone here have any theories as to why liquidity in this stock has completely dried up since the Lowell transition? It is a rather concerning development leading to some pretty wild price swings and it does not bode well for a future capital raise, which I view as quite likely due to the aggressive cultivation expansion plans over the next 12 months. In one of George’s recent interviews he stated unequivocally how important trade volume is in a stock stating that it’s “a proxy for a company’s ability to access capital markets for growth opportunities” so let’s hope this daily trade volume is an anomaly and picks back up toward average daily volume near 300K shares.
In terms of the float, recently Kyle stated in an interview it was around 8.3M prior to the PIPE lockup expiry. PIPE was around 1M shares so my estimate is a current float around 9.3M. I believe fintel has that detail wrong. I had a look at a few other sector leaders and the short volume ratio is almost identical to CLVR in the 25 to 30% range, so this clearly is a sector bet.
Yields on the 10 year have backed off but clearly macro trends are in major flux going forward with this 1.9T sloshing around. CLVR is completely wedded to the sector along with whether the growth/mo-mo trade is in risk on or risk off status. Hopefully CLVR starts to deliver big contract announcements and separate itself from the pack but until then the shorts will continue selling into every rally frustrating the longs in a big way. Best case scenario is the recent 10 support test holds and slowly the stock is able to climb higher and clear the many resistance zones on the chart with some positive NRs and perhaps this Mexico legalization news helps as well.
I am certain that fintel data is not accurate. I just rechecked my notes from prior presentations and the current float after the PIPE share Lockup expiry is near 9.3M shares, so 2M shares short is about 21% of the current float although if they continue building up at 30% of average daily volume (currently 1.4M shs) they would add around 6.7M more by the end of the month, to a total of 8.7M shs. So, that being said, I do not expect the same aggressive shorting to continue unabated. My guess is this is a short momentum play based solely on the current yield curve increase slamming the nasdaq and growth/momentum plays. I would think they will look to cover in the 9 to 10 support range and frankly without a significant news release to funnel in new buyers, unfortunately,I’d imagine the shorts may win. What is even more frustrating about this is that Mexico legalization is imminent and yet the top tier Latam leader, which I believe is CLVR, is not even catching a strong bid. Hell even Khiron is up 50% in the last week due to Mexico news. Remarkable how big a factor the shorts really are at suppressing the share price at least in the short term. All imo
Yeah the short volume is ranging close to 30% almost everyday in March...do you have a screenshot for the short volume as % of float? That information on fintel is available only to subscribers. 150% of float would be close to 13 or 14M shares short I believe which is hard to believe and would be a very troubling statistic (institutional money is rarely wrong). The put/call ratio of .22 is far more bullish vs the reported short position.
RS downside potential just doesn’t look complete yet imo. You may complete your partial.
LPR...Please illuminate the board with your valuation and fundamental analysis so we can benefit from your analysis.
I like Columbia care a lot. Heard a chat with the ceo and was highly impressed with him. Might have a look at the chart on that one. I know it’s up dramatically year over year
If it works for you go for it. I look for swing setups with better risk reward. I’m looking for anywhere between 20 to 30% reward potential and about a 10% risk and I don’t mind holding for a few weeks to a month for it to play out. I’d expected with both msos buying gramf and a falling wedge technical setup, I’d easily scalp 20 to 30%. Wrong! I was lucky enough to scalp 30% out of this post despac but since then I just zig when it zags which is a sign to move on...at least for now. I’ll keep it on watch though
You may be right but It’s just not a trader I’m interested in with that tight range and how thinly it trades. I prefer Lowell as a swing although I’m still getting a feel for how it trades post earnings. I’m still expecting weakness in that one and even possible lower BB being hit. But I think the analysts love the Lowell transaction and the first sign of solid execution could quickly send the shares over 3. The one issue I do have is I think Lowell has to do another raise to cover the cash burn and the additional acquisitions George mentioned on the call. 25M cash just doesn’t meet all his lofty acquisition and buildout goals and shore up the recent operational failures. All imo
Yes it’s not surprising. The mj sector has tanked with growth and momo stocks. Closing at 9.30 was actually impressive strength considering many stocks in the sector tanked by 40% or more last week. The warrant holders are finally starting to buckle under the relentless weakness in the commons.
Frankly I’m beginning to lose interest in this company. The msos setup should’ve worked beautifully as a short term swing trade and the fact that it didn’t means this is no longer a trade I will touch without some fundamental proof of concept. Lots to live up to imo. I’d bet on Lowell brand dominance over monogram especially in a state like Cali but it’s early days yet. All imo
Agreed that the plan post despac was really lacking. Michael did a bunch of interviews in the lead up to despac but there has been few ceo investor presentations to investors and just one jay z media spot.
But I’d still revert to the bigger issue. I think the institutional investors saw this cobbled together opex disaster a mile away. There’s a reason msos buying 2M shares in about 8 trading days recently couldn’t move the stock to even touch 11. To me that says it all. Michael was doing his utmost to hype it pre despac stating unequivocally the shares would be rerated higher by 70% because that was fair value. That begs the question just what valuation analysis was he applying here. Was he doing one of his backward run rate EV to sales slight of hand metrics like he did in the Subversive Acquistion spac. Crafty imo.
I get marketing just fine not that I have a degree in it but I’ve been alive long enough to know almost every bloody thing is sales and hustle. I also get the distinct difference between what George just did with Lowell and what TPCO fka Caliva is trying to do with Monogram. My money is on Lowell winning this match up in a big way despite all the jay z and roc nation hustle. Just speculation for now
I fail to understand why you harp on about this. They have a website, the ticker is fine, even the company name ,while banal, captures the house of brands concept they’re going to apply in their Cali roll up strategy. All I care about is execution and until they prove they can clean up their ugly opex issues, the chart is the most important barometer (your alert strategy is ideal). The fact msos buying almost 2M shares in the last two weeks could barely budge this stock speaks volumes for me. I dumped my traders for a tiny loss. The whole msos buying could move the needle premise was dead wrong. There are just too many motivated sellers. All imo
Ok thanks for your take. My read is we have further to go on the downside toward lower supports. Chart still looks good and not expecting severe damage but the 1.75 to 1.80 support won’t hold. Expecting RSI to take a break and go sub 50. Just my technical take. All imo
MSOS was back on the bid yet again but just barely moving the needle. Rather troubling just how motivated very big sellers are to dump this stock. MSOS added another 500K shares so far this week and has increased from 2.1M to 3.9M shares in a little more than week and the stock is still mired in the 10’s. It’s not like this is a high volume stock so MSOS significant buying should be moving this one above key resistance points but it just isn’t happening. My trade premise was MSOS would backstop support and funnel new buyers to drive the share price over most post despac resistance points which has yet to materialize. Based on how MSOS positions it’s holdings my guess is that at its current 3.79% weighting on GRAMF the fund is almost at their target, perhaps they move it into the mid 4 or 5% but I doubt they are going to buy much more until this company starts living up to some of the hype and actually delivers blow out quarterly numbers, which I do not see happening in 1H 2021. So, sellers may retake control soon without a significant announcement or added decriminalization talk to generate more sector hype. Bottom line: despite the recent descending wedge break to the upside my finger is getting itchy on the sell button here. All imo
I was shocked it held up in the 2.40s as long as it did before selling off into the close. I. need to listen to the cc but apparently Q1 guidance is equally awful. These guys are now creating a very poor pattern of quarterly operational disappointments. The 225K house was supposed to be in order by end of Q1 churning out 42K lbs of product on an annualized basis. George has trusted Mark on the operational side perhaps too much. Hoping George doesn’t have a blind spot as he is always looking downfield while quarterly disappointments accrue. I almost peeled off some of my cores yesterday and put on a short but I like this Lowell move a whole lot. It positions this company to move toward “one of the Cali leaders” category over the intermediate term and thus the stock should trade closer toward a leader valuation metric if/when they get their house in order. For now the path of least resistance is sideways to down toward supports (unless the sector catches fire with more decriminalization news) All imo.
Nice trade! A quick 10% win is nothing to sneeze at. This stock has been a lot of fun to trade the last few months. A scalpers dream although at times a bit illiquid.
It looks like a Breakdown out of a rising channel. Now moving up to backtest the breakdown. Looks bearish for now. I’m saving my trading pennies to see how it tests recent supports. All imo
George,How is your chart looking now? I dumped my traders yesterday when I saw the MFI and RS divergence on the daily. I do not like to see 52 week highs met with lower MF and RS especially going into earnings. I’m still holding cores. Fundamentally, EV is a bit rich here at around probably 4X 21 sal3s. so I’m thinking pullback to some recent supports but I need to listen to the archived cc and get a better understanding. The earnings were frankly awful on a QoQ basis.