Time to separate the wheat from the chaff. Canadian LP 2.0...US version...continues. Most of these 'top MSOs' only knew the industry when capital was [essentially] unlimited so they focused on growth, scale and chasing siloed markets...paying to play. This growth was not efficient and redundant. These companies could easily use the large profit margins of those limited markets to hide flaws. Now with capital all about nonexistent things are changing. These companies need to slow growth and focus on operational efficiency...to which most have no experience...so they blame competition, cost compression all the while clinging/pushing toward some govt news to help float the industry. So far they are doing a good job hiding their flaws by closing/selling assets in challenging markets while using 'protecting margins' as their positive spin. Delaying tax payments while saying it is a no brainer because owing the govt accrues at a lower rate than the interest rate on debt. At least one has said that they reached their US capital spend...I guess that is because, like the ETF MSOS, they only like to buy when prices are high and sell when they are low? Nope, just positive spin so don't have to say they are out of cash. Some have filed S-3s saying that it is good business practice to always have one accessible...or that it is in preparation for possible US listing. Well expect more to follow suit...especially if some form of banking happens and the industry sees a (temporary) stock price spike. Issue at the peak, right? Of course they don't want to dilute around 52 week lows...but most will have no choice because they won't know how to make ends meet any other way but through issuing shares and/or cutting jobs...or via sale leaseback. Rough seas ahead as companies try to rein in spending and focus on efficiency. Bearish on the (upcoming short term of the) industry...but Bullish on SHWZ, and their strategy, but most importantly because JD has navigated this situation before (with Albertsons).
