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Jumped back into MPX this morning. I sent a brief email to Elizabeth in Investor Relations to clarify whether the 0.1673 stock swap exchange rate was firm or contingent upon the share prices of the two companies at the time the deal closes assuming shareholders approve in January...will post her response if/when she responds.
https://seekingalpha.com/article/4215307-cannabis-merger-shareholders-receive-mpx-bioceutical
We'll be alright...Hadley reeks with confidence and Scotty exudes competence. Pretty sure those two execs know what they're doing. The more I think about it the more I'm inclined to believe that US-based MJ companies is where you want to have most of your speculative pot money going forward. There are still some "undervalued" (or should I say "less overvalued"?) Canadian stocks like HEXO & OrganiGram perhaps still to be had north of the border but IMO some of the ones in our own back yard is probably the smart play in the longer run.
https://www.cnbc.com/2018/10/17/billionaire-leon-cooperman-on-how-he-ended-up-investing-in-pot-stocks.html
Ol' Cooperman likes iAnthus/MPX among others. You don't become a billionaire by being wrong too often.
PS I was rooting for your BoSox last night but we REALLY have to work on your choice of football teams. Go Steelers.
Thanks for the thoughtful and informative reply...precisely the reason I like reading your posts.
This is a nice resource I stumbled on some time ago while researching US-based pot stocks and thought I'd give a shout-out to the person who put it together, whoever they may be...
https://www.reddit.com/r/USWeedstocks/comments/8vihql/8_us_operators_geographic_footprint_cannaroyalty/
Two of the links he provided are maps of all the stores and facilities currently being operated by various companies in various states around the country...
https://www.mapcustomizer.com/map/170807-US-OPERATORS-CURRENT
and another map shows both current and proposed facilities...
https://www.mapcustomizer.com/map/170807-US-OPERATORS
I can't vouch for the accuracy or the timeliness of these maps but it sure is an impressive effort by the author.
Reading local Michigan newspapers seems to indicate that most/all of the medical MJ licenses they have issued have gone to small privately-owned local businesses and to my knowledge no publicly-traded company is currently operating there...nor are any indicated by the above maps. BTW, as you likely already know these dispensaries only made their first sales just a few days ago...
https://www.mlive.com/news/index.ssf/2018/10/medical_marijuana_industry_see.html
FYI, I wasn't planning to go long for any length of time on MedMen, if at all. I have come across them many times while researching other pot stocks and have read some good things and some not-so-very-good things about them, but I just haven't yet done enough DD on them specifically to decide for myself.
The reason why I asked you about MedMen & Michigan is that with the elections coming up next week and several marijuana referendums in 4 different states on the ballot I was toying around with the idea of perhaps making some real quick swing trades that might prove profitable depending on the voting results, and Michigan is one state that will be voting on legalizing recreational MJ. I thought if MedMen really did already have a number of medical MJ stores operating there then should the MI voters approve recreational pot as well then perhaps we might possibly see a nice little brief pop in their stock price that a guy could conceivably make a quick profit on it as a result...especially since it seems MedMen is currently the most shorted stock in the entire sector...
https://www.fool.com/investing/2018/10/21/heres-which-marijuana-stocks-investors-are-betting.aspx
But as I suspected this purely speculative play appears to be null and void so I guess I'll just move on to a few other ideas I'm mulling over. Thanks again for your input...much appreciated.
Thanks for the response and the kind words, gw...likewise.
A couple things...first you wrote earlier last week that each MPX shareholder would receive 1 share of the new MPX International spinoff and it appears that the correct number is really 0.1 shares. This is from another investors website...
Hi everyone, I sent an email regarding our MPX shares and how those will be converted to MPX International Shares. Here’s the response I got from an Investor Relations rep, Elizabeth Barker.
“You will receive 0.1 shares of MPX International for each MPX share. At this stage the pricing of these MPX International shares has not been established yet. We will provide updates when the price has been set.”
So I just wanted to clear that up in case you were mistaken or it was just a typo on your part.
Secondly, since you are a fan of both companies in the proposed merger you might enjoy watching this edition of the Midas Letter that was made very soon after the deal was first announced...
https://www.youtube.com/embed/yWWWJMgupRg
iAnthus CEO Hadley appears at around 11:00 into the video while MPX CEO Scotty comes on later at around 50:00 to talk about the merger/takeover, and if you haven't already seen it you will likely find it informative as I did.
One thing that caught my ear was when Boyes was asked about the stock swap and he responded that "the number of shares will depend upon the share price of iAnthus at the time of closing"...this occurs at around 53:00 into the video. Was wondering how you interpreted this comment and whether or not this implied that the announced 0.1673 ratio is not totally set in stone? Boyes also quoted the wrong exchange rate so perhaps he simply misspoke but I was just curious what your take on it might be?
Here's hoping you have a profitable week...both the MJ sector and the broader markets are mighty skittish these days.
That is most definitely huge news. When I was long MPX I was extremely concerned what would happen to the share price if the Arizona supreme court had upheld that ridiculous decision by the lower court, even though everything I read indicated that they were likely to overrule it.
I sold my MPX the day after the merger announcement...mainly because I thought MPX shareholders were not getting nearly enough since it was so undervalued to start with and the main reason why we went long in the first place. Plus when I looked at iAnthus they seemed terribly overvalued compared to many other US-based pot stocks. I have since reconsidered and am now contemplating buying a lot more MPX than we originally held...
https://seekingalpha.com/article/4213781-ianthus-became-top-u-s-cannabis-play-mpx-deal
This new legal development lifts a huge cloud that was hanging over MPX which derives a large portion of its revenue from here in AZ and was probably one of the main reasons why iAnthus decided to absorb them and in the process reduce their market cap-to-revenue ratio to make them more attractive to MJ investors and speculators.
I like watching interviews of the CEOs of the stocks I swing trade...it gives a face and a voice to the company. Here is ol' Hadley Ford from iAnthus back in early August in case some people haven't seen it...
https://midasletter.com/2018/08/video-ianthus-capital-holdings-inc-cnsxian-ceo-on-new-york-and-us-expansion/
If we do get back in then selling on the news 10 days ago may have been fortuitous as the price has since dropped significantly during this recent sector-wide plunge and can now be had at a significant discount from where we sold...kinda like getting some shares for free. Sometimes it's better to be lucky than good. I also like the fact that Scotty Boyes will be the CEO of the spinoff MPX International...he is not a flashy guy who hypes his stock but he seems to know what he is doing when it comes to running a company that produces real revenue. If he does with MPX International what he did with MPX then any shares that longs get in the deal will be icing on the cake.
Any info on when the lockout period would start assuming MPX shareholders approve the deal in January?
Enjoy reading your posts, IP. This article has a table in it that summarizes in what states some select US-based pot companies are operating (dispensaries, cultivation sites and/or extraction centers)...
https://seekingalpha.com/article/4213781-ianthus-became-top-u-s-cannabis-play-mpx-deal
I think a check mark might indicate not only existing facilities but probably also includes states where a given company may have future plans to expand into or are in the process of applying for a license.
MedMen is the only company listed in the table that has a check mark for Michigan, but so far I haven't been able to verify that they have any current exposure in that state or even any firm future plans. Was wondering if you knew whether or not MedMen really does have any current or anticipated future activity in MI?
I also found this statement in another article...
Michigan has disclosure rules that essentially preclude public cannabis companies that are licensed operators from having exposure to the Michigan market, according to 420 Investor Alan Brochstein. But some ancillary players do have exposure, and are certainly in a position to benefit from legalization in Michigan.
Assuming this statement to be true, what ramifications would that have on any publicly-traded US-based MJ company? Thanks for any info you can provide.
Time for a reality check...
https://www.bnnbloomberg.ca/pot-stock-volatility-won-t-ease-anytime-soon-bmo-banker-says-1.1157625
How hard can it possibly be to find a second Canada??? We wouldn't even have to look for another one if the Canucks would just start smoking twice as much.
Better buckle up your computer chairs, boys and girls...it's gonna be a bumpy flight. As first appeared in Punch way back in 1846...
"You pays your money and you takes your choice."
I meant to tell you, some brokers (like Schwab, for example) most certainly do allow you to place stop losses and limit orders even on OTC stocks to restrict losses and/or protect gains. So if your current broker does not and you're interested in swing trading some day you might wanna shop around for one that does and set up a swing account with them.
As you know, OTC stocks tend to already be more volatile than the average stock due to the lower trading volume. And pot stocks are already plenty volatile in their own right. But that's usually what you want if you're looking for price swings, right? The downside is that you may find you'll have to set your stop losses quite a bit lower than you might otherwise prefer just to avoid getting kicked out of too many potentially good trades due to normal price fluctuations.
Like this for example...
https://www.marketwatch.com/investing/stock/ORHOF
What the hell causes price action like that??? Shorts scrambling to cover and bank good profits before the weekend?
That's some crazy stuff right there, boy. A daytrader's dream but way too fast for me!
Hey John, I think there's something wrong with my computer monitor. All of the arrows and numbers next to my pot stocks are green...and I'm pretty sure they're supposed to be red! I may have to pull out my owner's manual and color calibrate this sucker.
Went long on OrganiGram yesterday...mostly on a hunch/hope that after this severe sector-wide drop some of these MJ stocks might be approaching oversold in the near-term. Most of the technical indicators I look at were screaming "NO! Don't buy here, you idiot!" but I went ahead and got some anyway. There's a fine line between courageous aggressiveness and reckless stupidity so time will tell if I crossed it this time...LOL.
Not sure if today was just a quick bounce before we continue heading downward or if the pot stocks will begin to level off somewhere around here for a while. So many of them rocketed upward in late August with little or no pullback...and what goes up with no resistance often comes down with no support. I wouldn't mind it at all if we started trading flat in this range for a spell...a little consolidation to build up some support levels would probably be healthy for the sector after doubling or even tripling in just 3 or 4 weeks and then getting sliced by a third to a half in barely one.
I'd feel a lot better if some of these pot stocks had at least one or two green Heikin-Ashi sticks but all the ones I've looked at so far today are still bearishly red so I think caution here remains prudent. I'm also concerned what the broader market might do...
https://www.marketwatch.com/story/the-wall-street-analyst-who-called-this-stock-market-rout-sees-another-nasty-drop-for-the-sp-500-2018-10-25
https://www.marketwatch.com/story/dont-get-too-cute-looking-for-a-stock-market-bottom-just-yet-chart-watcher-warns-2018-10-25
Anyway, I'm now sitting on 2 of the most heavily shorted stocks in the MJ sector...CannaRoyalty & OrganiGram. They say misery loves company! One good thing about being a pot investor/speculator...when somebody whines "My DJIA and S&P 500 stocks dropped 20% in only one week!" we can look at them and say "Ha! Is that all???".
Anyway, is was a good day to be a steely-eyed marijuana man. Let's see what tomorrow brings.
PS Think you're gonna like swing trading once you move to Norcal. I am discovering there is a certain amount of freedom that comes with popping in and out of stocks at will rather than being tied down to them for the long haul. I'm not a big player like you are...just a small-time hack doing it mostly for the sheer fun and pure challenge of it. Pretty sure you would enjoy it a lot and be very good at it.
This is exactly what I was afraid of when I made my post before the opening bell on Monday and why I closed out several positions last week.
The term "market crash" is a bit vague and nebulous...kinda like "Indian summer" in weather or "stretch drive" in baseball. But it is frequently defined as when stocks drop 50% or more from some previous high. Many of the MJ stocks made intraday all-time highs last week or at least posted near-term highs. I took a quick look at a few pot stocks that are either the biggest ones out there or ones I have been swing trading the last 6 weeks and looked at how much they've fallen since they made those intraday highs (most of them on Oct 16th)...
Symbol: High / Today's Close = % Drop
CGC: 59.25 / 37.76 = -36%
AUR: 12.53 / 7.39 = -41%
CRON: 13.00 / 7.63 = -41%
HYYDF: 7.17 / 4.23 = -41%
OGRMF: 6.68 / 3.82 = -43%
APHQF: 16.19 / 11.27 = -30%
CNTTF: 11.97 / 7.73 = -35%
ORHOF: 7.00 / 5.14 = -27%
So we're not too far away from it being a sector-wide "crash" in my book. Another day or two like the last several and we're there.
I would not be at all surprised if by the time we finally pull out of this death spiral we're now in and mercifully bottom out that many of these pot stocks will end up right back where they started before the August 15th liftoff or pretty close to it.
At this point the only question in my mind is if the rate of descent will finally slow down a little and we then slowly grind down toward whatever bottom we're eventually headed for (with perhaps a few sucker rallies and head fakes thrown in for fun) or whether the freefall will continue for a few more days and we overshoot and get a dead cat bounce.
Short sellers made almost half a billion bucks the last 2 days alone and IMO there's probably more to be had before it's all over and we're back in a trading range again, wherever that ends up being. Hope I'm wrong about this hypothetical scenario of mine and we'll find out soon enough but in the meantime a tip of my cap to the bears.
"We who are about to die salute you!"
This is old news (~3 weeks ago) but I just stumbled on it so I'm posting just in case some others had not yet seen it either...
https://www.bloomberg.com/news/articles/2018-10-04/undervalued-hexo-drawing-interest-from-pot-rivals-activist-says
I've been reading for quite some time that Riposte (2nd largest shareholder, I believe) has been squawking about the "depressed" stock price for a while now but this video gave a face to the squawkers along with their rationale.
Market's been "hating on HEXO" for over a week now but HYYDF is far from alone from the looks of things the last several days.
Yeah, I saw that as well. Still mostly concentrating on California which is the largest market by far but I read Nevada is also potentially a lot bigger market than I woulda thought...maybe all them touristas. Nothing like gambling while you're stoned outta your mind.
Speaking of which if online poker was still legal for Americans I'd probably be playing a lot more stud than stocks...LOL. Pot & poker...a man can always dream.
Well, today was certainly a real hoot and tons of fun! We'll have to do this again real soon...like maybe on the Twelfth of Never.
Good call on that one, John. I started doing a little DD on it but not much out there on it...most definitely under the radar. Didn't act but I hope you did well with it today...not too many green arrows so it was nice to see one. These pot stock charts all look like total crap right now but the big market tanked as well...guess it doesn't make much difference if you lose money on CannaRoyalty or Caterpillar...LOL.
At least we got Game 2 to look forward to tonight.
Yeah, go pop a cold one after a nice recovery and go watch Game 1 of the World Series.
Hey, maybe we should find out who that company is that puts the glue on the back of marijuana tax stamps and invest a few bucks in them? Seems they have a monopoly in the whole country and have a stranglehold on the entire Canadian pot sector!
A multi-billion dollar industry waiting on some old guy with a brush and a can of glue...too funny.
Looks like at around 11 AM the big boys decided that all these MJ stocks had finally fallen far enough and started buying.
Hooboy, sure am glad I closed out 4 swing trades last week while they still had some real nice gains. I can handle watching 2 pot stocks plummet (one for each eyeball) but watching a half dozen all crash at once woulda been a little nerve-wracking...LOL.
A little party-pooping the last 10 minutes on CannaRoyalty...it looked like she was about to close right on her 20-day moving average after a crazy day.
According to that link I posted, the amount of CannaRoyalty's stock that was shorted jumped by around 6 million shares in the last 2 weeks of September alone...so that's like an average of almost 600,000 shares a day sold short...which seems excessive to me. My charts are all messed up now because of the symbol change...do you happen to have an average daily volume handy for that time period as a sanity check? I've tried all the different old and new ticker symbols on tradingview and I can't get squat to come up now. I've put in CRZ, CNNRF, OH & ORHOF and zippo...what a PITA this name change is...
https://potstocknews.com/cannaroyalty-name-change-origin-house/
Hey, John...check this out. Apparently the fledgling pot industry in the Great White North is already coming unglued, literally...
https://www.marketwatch.com/story/canadas-pot-party-big-demand-short-supply-and-stamps-with-no-glue-2018-10-20
TORONTO—The final sprint to this week’s launch of legal recreational marijuana sales in Canada can be summed up by a small stamp.
To sell any marijuana product in Canada, the government requires a tax stamp on the package, but the stamps are only available from a single licensed vendor, the Canadian Bank Note Company Ltd., or CBNC. Once the pot producers dealt with CBNC to receive their stamps, they were likely dismayed to find that the stamps had no glue on them — and there was only one company in Canada that could affix glue to the stamps.
“If you didn’t book your time six months ago with the one company in Canada that puts the glue on them, then you’re in trouble,” Tilray Inc. TLRY, -4.40% Chief Executive Brendan Kennedy told MarketWatch. “I don’t even know what you do.”
And to top it all off, most of the legal weed is being shipped through the mail and Canada's postal workers may go on strike soon. LOL...what a clusterCanuck.
Well, fellow former CannaRoyalters...I'm not too crazy about the new name and we lost the cool rocket-looking logo...
http://originhouse.com/
But I guess I can live with it as long as Origin House makes us all some $$$.
Despite getting dragged down today along with all the other pot stocks I'm still liking the chart from a TA standpoint...as long as it doesn't break down through the 20-day moving average that it has bounced off twice before in the last month and then proceeded to rapidly shoot right back to the upper Bollinger band. This'll be the 3rd time it's done it if it can hold in this strong headwind.
Interesting piece of news today...2 of my favorite MJ stocks are now in the top 3 for short interest ratio. OrganiGram has about 1/3 of its total available trading shares shorted and the number of shorted shares in CannaRoyalty, err, I mean Origin House (ugh on that name) is also now at about 1/3...almost doubling in just the last 2 weeks of September alone...
https://www.fool.com/investing/2018/10/21/heres-which-marijuana-stocks-investors-are-betting.aspx
We need that stock price to hold fairly firm right here and then bounce back up off that moving average to confirm we're back on track and that it's time to load up a little before a good old-fashioned short squeeze.
As for CannaRoyalty, there's something to be said for being the largest distributor in the largest cannabis market in the world. The company could expand into neighboring Nevada as well, which itself claims a significant marijuana market. CannaRoyalty isn't flying as much under the radar as it was earlier this year, but it doesn't seem to be as much at risk of a meltdown as some other marijuana stocks.
The stocks of MedMen, Organigram, and CannaRoyalty could certainly drop. Short-sellers could rake in some profits over the short run. Over the long run, though, these probably aren't the top marijuana stocks to bet against.
I like it when shorts squeal. Make it so, OH.
John, I hear what you're saying and I fully understand your viewpoint...I just don't happen to agree with it is all.
I think a lot depends on how a person views the budding cannabis industry (no pun intended). You seem to think of it much like the new computer industry was back in the late 80s or early 90s and these marijuana companies are simply the hardware and software companies of that time. If that is the case then your long-term buy & hold strategy makes perfect sense and is the smart play.
Let me give you a quick example...back in the early 90s I bought $30,000 worth of Microsoft stock. What I would then typically do is sell out-of-the-money covered call options on it...when the expiration date arrived if the stock was below the strike price then I kept the premiums for a fairly nice gain. And if the stock was above the strike price then I also got some appreciation on the stock itself as well as the premiums for an even nicer gain. I did this for a while until I eventually got bored and moved on to other things. Now, if I had just simply stuck all that original stock in a sock drawer and then totally ignored what the market was doing it would now be worth many millions of dollars. Ouch! So obviously in that case your buy & hold approach woulda been far superior to my constantly flitting in and out of the stock, even had I kept at it all these years.
But I don't view the MJ sector like that at all. I believe buying and holding Marijuana ain't gonna be anything like buying and holding Microsoft. I instead look at it much like the dotcom bubble that arose in the late 90s was when almost anybody who bought one of those fancy new gizmo computers started an internet company and investors just threw money at them and as a result valuations reached ridiculous and unjustifiable levels much like they are right now for pot stocks. IMO, a buy & hold strategy for the vast majority of these MJ companies is tantamount to a financial suicide mission.
So as long as the sector is trending upward or at least remains flat as it has been lately I intend to continue swing trading these stocks until it no longer remains profitable to do so and I stop getting good returns. I am trying to at least stick with only those ones which are "undervalued" and I would not be at all surprised if my list of favorite stocks to swing is very similar to your list to hold. I'm not savvy enough to know when the day of reckoning will come but I am pretty sure that it will eventually arrive...might be next year...might be next month...might even be this week for all I know. But hopefully when it does come I will only get slightly singed instead of suffering 3rd degree burns.
https://www.fool.com/investing/2018/09/16/marijuana-stocks-are-doomed-for-a-colossal-collaps.aspx
https://www.marketwatch.com/story/marijuana-investors-may-lose-90-of-their-money-in-canada-so-consider-the-really-big-prize-elsewhere-2018-10-18
Note that these articles were penned by guys who have written some very nice things about certain pot stocks...so it's not like they are alarmists but are just being realists. There's nothing wrong with us having opposing viewpoints...after all, a difference of opinion is what makes a market in the first place, right? If we all agreed it would be mind-numbingly boring.
HYYDF was our first swing trade so I kinda have a soft spot for ol' HEXO...they say you never forget your first.
But one thing that is a little scary (okay, make that WAY scary) about the massive rise in valuation that many/most of these pot stocks experienced between mid-August and early September is that they went up so far and so fast that there never really was any time to build any meaningful support levels. There was practically no pause or pullback during this meteoric rise...no time to consolidate at various levels along the way while these stocks were doubling and even tripling in just a few weeks. And that's why we sold off our HEXO in early October for a hefty gain after holding for a month...because I figured that if it broke down from the levels it was at there was no telling how far it could drop. And right now I'm sorry to say that HYYDF's chart kinda looks badly broken to me. If you or anybody else can look at its chart and make out any solid support level I'd love to hear it because quite honestly I don't have a clue myself.
I'm not exactly sure why HEXO in particular took it on the chin so bad on Friday...it was pretty much a bad day all around for MJ stocks in general but last week as a whole was positively brutal for HYYDF as it dropped almost 23% from Monday's open to Friday's close and is down nearly 30% from its all-time high set on Tuesday. I even checked to see if all of their greenhouses had maybe burned down or something but couldn't find any relevant news about them to explain this sudden plummet.
HEXO is still one of my favorite stocks as far as the bigger cap Canadian pot stocks are concerned and we went a little long again during this carnage although not as big a position as before. I believe HEXO is undervalued relative to many of the other MJ equities but compared to "normal" (or should that be NORML?) stocks it is still very much overvalued, so this kind of a harsh correction is always possible and should be expected to occur from time to time. If this latest move surprised anybody then they probably shouldn't be putting any money into this sector in the first place because quite frankly this kind of drop could happen to any of them at any time.
What remains to be seen at this stage is whether HEXO will rebound some next week (or at the very least stabilize for a while at these current levels) after this massive selloff or whether it was just a harbinger of things to come for the rest of the high-flying marijuana sector and our dear HEXO just happened to be chosen to lead the way.
HEXO wants to be a market leader but I seriously doubt this is what they had in mind!
Same back at you, John. I've enjoyed reading many of your posts these last 6 weeks or so while I was lurking and climbing the MJ sector learning curve so keep 'em coming.
I generally don't trust stock analysts as far as I can throw them with their constant "BUY!" squawking and pie-in-the-sky price targets but I kinda like this Russell Stanley fellow...
https://www.cantechletter.com/2018/02/canntrust-holdings-has-88-upside-echelon-wealth-partners-says/
Here's a video of him back in late August briefly discussing what I just mentioned in my previous post among other things...the possibility of eventual big money rotation from overpriced Canadian stocks into undervalued US ones...
When it comes to these pot stocks our trading philosophies may differ somewhat (ie, swing trading vs long-term hold) but in general I agree wholeheartedly with your post. I've never shorted a stock in my life although in the past I've bought put options on equities and market indices. But even if I was prone to shorting this would most certainly not be the stock I would try it with...way too much potential for solid if not spectacular growth, IMO.
CannaRoyalty only recently appeared on my radar screen but so far I really like what I've learned about them and the way it's looking...technically in the short-term...speculatively in the intermediate-term...and fundamentally in the long-run. It is my opinion (right or wrong) that the vast majority of Canadian MJ stocks are grossly overvalued and that the "big players with the smart money" will soon begin (if it hasn't already started) to exit some of their positions and bank some of those profits they've realized in the huge run-up that began in mid-August. If so, they may begin to rotate some of that cash into the US-based players which generally speaking are greatly undervalued relative to their counterparts north of the border. They do that and we may see the much smaller market caps of the American pot stocks begin to blossom resulting in some very nice gains in their stock prices even while the Canadian ones face headwinds and start to break downward.
As the company itself said about the marijuana market..."Canada is big. California is huge." And they seem to be following up nicely on this belief the way they are concentrating mainly on the single biggest MJ market of any country or state...
https://imgur.com/PsIc7tt
Finally, funny you should mention their logo. As an old propulsion test engineer the first thing I thought of when I saw it is..."that thing looks like a rocket!"...LOL. I hope they keep it after they rebrand themselves soon. I imagine we may seem a name change like Hexo recently did...with CNNRF dropping Royalty since they have morphed from an investor into a provider.
Lots of rocket fuel left in this one, methinks.
I'm no technical analysis expert by any means, but CannaRoyalty's price chart sure looks strong to me at the moment.
I've been swing trading some of these pot stocks since only early last month, but as I was coming up to speed on this sector one thing that struck me as I flipped through the price charts of many MJ companies is how similar they were. They all started rocketing on August 15...it's like a bell went off opening the gates and they were all off to the races. Of course, that bell was the Constellation-Canopy announcement. Many of these pot stocks doubled and tripled in just 3 or 4 weeks. But then they finally leveled off in early to mid-September and for the last month or so most of them have been fairly flat and trading in a range...which is great for swing trading if you're looking to nail down some quick 20-25% gains by selling into strength after a few days to a couple weeks and don't get too greedy.
But now it kinda looks to me like many of them are starting to break down and my hunch is that we might be entering a downtrend that could last for several months now that the hype of Legalization Day has finally come and gone. But as of right now at least CannaRoyalty looks like it could possibly buck this trend and is breaking to the upside. Hope so anyway, because we just took a small position in them earlier this week.
Funny thing about price charts, though...many of them look terrific...right up until the time they don't. If I'm right it's gonna be mighty tough to make much money on most of these pot stocks in the foreseeable future unless you're a shorter, which I'm not. But there are always exceptions to the rule...hoping CNNRF is one of 'em. They certainly were yesterday, at least.
Like most folks here I was mighty happy when I first heard the news this morning. But now I think that what at first was a good deal for MPX shareholders is not nearly so good after all. The main reason why I thought MPX was attractive when we went long in the first place was because it was a greatly undervalued company with the potential for some terrific share price appreciation. What just happened is that MPX shareholders are now being asked to trade in their stock in a greatly undervalued company and exchange them for a greatly overvalued one. Check out this table...
https://seekingalpha.com/article/4211913-medmen-pharmacann-acquisition-steal
MPX was the cheapest equity on that list while iAnthus is by far the most expensive...by 100 times. The market cap/revenue for iAnthus is outrageously high...I would never have bought that stock on my own so why should we trade in our MPX shares for it? So instead we just sold, because the reason why we bought MPX in the first place is now null and void, IMO.
https://ir.mpxbioceutical.com/press-releases/detail/65/ianthus-and-mpx-bioceutical-announce-transformational
MPX made $3 million Canadian on just 10 stores...iAnthus has 46 stores and couldn't even bring in $1 million. Really???
On to greener pastures and more undervalued stocks for us...if you stay long hope I'm wrong but IMO MPX management was sitting on a potential gold mine and turned it into fool's gold for their faithful shareholders. Don't be too sure that they will approve this deal in January if ITHUF shares should crash and burn before then. Just too risky for me at such stratospheric valuations...if you want to speculate on US-based players there are far better ones out there IMO. No flames, please...just posting my opinion is all. The market will eventually decide who is right and who is wrong. Good luck to all.