who would 'they' be in that scenario?
why would they want to sell out the corporation so that institutional investors can buy it cheap?
I think people here got this 'institutional investor' thing backwards. Big institutional investors are large money managers, they make money handling other peoples money. They want 2 and 20, the first 2 percent of the returns and 20% of everything above. Hedge fund managers
They put their bets (other people's money) on large corporations that match certain thresholds on market cap, share price, and listing - most of these institutions, by way of their investment offerings - only deal in owning indexes of large diversified portions of the economy - like TSX small caps for example - something we may soon qualify as. Many of the money managers working these funds won't bother looking at stocks under $5 a share. Many times these rules and strategies are built into the funds management contracts and agreements.
you can't diversify a solid fund looking at a bunch of loser penny stocks for a 5 banger, - that's just not how they do it - we don't feel that way about CGC, but Im sure the owners of most penny stocks believe their corp should be worth more - institutional investors don't go after start-ups losing cash, that's more speculation than anything else, we are speculating the future is going to be radically different than the past
they are looking for a company with a history of solid, steadily increasing earnings. If they buy that, and they got their 2 and 20, they can't lose
we should get there, but there is that risk we won't - and that is the ONLY reason this stock trades under $3 a share. Free cash flow and increasing earnings, then the institutions show up and offer boatloads of cash for shares sold at a discount to market. They provide liquidity, and the boldest of them will be paid the most
Price is what you pay
Value is what you get
