Hi,
Thanks for reaching out, I'm happy to help walk you through Management's thinking.
The share consolidation is being proposed as a part of our effort to make the stock more attractive to a broader set of potential investors. First, many institutions will only invest in marginable securities, which typically means shares with a minimum price of $3 to $5 depending on the institution. Second, a higher share price ensures that we would meet certain minimum listing requirements established by major exchanges in the United States - opening the opportunity for us to seek such a listing in the future. Supreme has come out of Q1 being broadly acknowledged by the investment community as the LP that is consistently outperforming its share price/market capitalization. In management's view, leveraging that reputation to attract a stronger, more diverse shareholder base will be an overwhelmingly net positive to current shareholders.
As far as the price after the split, Supreme is currently trading at three times its cash-on-hand which is unique not just to the current cannabis space, but for any company proposing share consolidation. This provides a great buffer against any post-consolidation depreciation.
Many reverse splits are done from a position of weakness (i.e. trying to avoid de-listing after a dramatic shift in share price), I hope you see that this is quite the opposite. However, if you have further questions/concerns please let me know and I'd be happy to continue the conversation.
Thank you,
Scott
Bayfield Strategy, Inc.
Toronto | 357 Bay Street, Suite 502.
New York | 54 West 40th Street.
416 466-6265
www.bayfieldstrategy.com
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