Aurora Cannabis Inc (ACB)

[FUNMAN]

You bring up a key point to my debt thesis. Good debt vs bad debt.

Bad debt is to keep the lights on. Good debt is for growth.

ACB needs foreign operations to grow faster and outpace Canadian operations. The EU and South American markets are so much bigger than Canada.

I happen to think dilution to pay off debt obligations to make them go away is a better option than creating new debt to make old debt go away because their new cost of debt will be so much higher.

Current shareholders will take it on the chin if they hold.

That said, they can always feed the PPS decline buy selling now and buying again at a lower PPS. There is the risk it won't happen that way.

But, if ACB goes through with the dilution, nothing will ever prevent them in the future once they are profitable and have FCF from buying back shares to reduce the O/S.

The BIG question is "when do you want to own ACB?"

I own it now too.

Agree that share issuance would be a short-term disaster for the PPS.

But I think company will try to refinance/raise more debt, as opposed to equity, for liquidity issues. Most of the share issuance was for acquisitions, not liquidity. We shall see.