RE: Sterling's letter to share holders.
I'll begin with saying this is half of what I wanted to hear/see from GrowLife. I want to see G.I.F.T contracts close, I want to get an idea of how much revenue each of said contracts can potentially generate, I want to see partial results of "overwhelming response" that shareholders were told about early December. These items would help me better determine how I will vote. As such, my decision has not yet been made. I hope to find what I'm looking before prior to Feb 7th; otherwise my vote will have to be made by historical precedent and faith. I'm not much of a person for faith alone but it has creep into my life from time to time.
While the letter is nicely written and makes subtle promises, anyone can write such a letter and lack the substance a person needs to make a properly informed decision. Again, more numbers and less promises.
Sterling's first point that raising capital is very distracting and difficult to come by in this industry is not wrong. Banks will not lend to them. One of the more important parts of my history is having worked for a small 20 employee business and to have watched it grow to the point where a Fortune 100 company bought them out. One of the more difficult challenges this company faced when trying to grow from a small business to one that employed over 600 individuals around the globe was finding capital. In the end it was not the banks that lent the money, it was a group of private investors that formed an LLC for the sole purpose of lending large capital to the aforementioned small business. This was in a budding industry, during the .com boom era, and yet banks were making it very difficult to borrow money to expand. I am not at all surprised that the joint venture was the only way to proceed. Had it not been for the private investors they would had never grown to the size they are today.
Admittedly, I don't entirely understand the terms of the 40 million dollar joint venture, no one outside of the deal makers can. There are some very important elements that are missing from the public eye. Such as, what are the milestones? What does it mean exactly when said milestone(s) is/are hit? We can deduce what it means when speaking strictly of the dilution to dollar invested to some extent but even that is somewhat unclear. Which brings us to Sterling's second point:
"To the extent there is "dilution" under the CANX USA JV, the relationship is structured to allow GrowLife management a great deal of control and to incentivize only success-driven dilution that will benefit all shareholders large and small, complete with milestones and checks/balances."
Again, I - like all of us - would prefer to have examples of what these milestones are. But if history is any indication, the dilution to date has been used smartly and for the benefit of shareholders. Prior to the 'Green Rush', GrowLife shareholders had enjoyed a 52 week run of over 400% growth, most of it was from the second half of the year after the early 'dilution' was supposed to, according to some on this board, make the stock crash to sub penny values.
GrowLife shareholders have even enjoyed a nice year to date (YTD) return of 35%. Three weeks and a 35% return after a bear raid and correction is not bad. As technical traders on this board have pointed out, GrowLife is/was oversold. I cite the above evidence to prove to myself, and whomever is reading this, that dilution does not equal death when performed in a responsible and thoughtful manner as GrowLife has emphatically proven thus far.
Sterling's 3rd and final point of not allowing us to sub-come to the rumors, lies, and personal attacks. If I recall correctly, leadership at GrowLife does or did read these boards. It's hard to not go out into the world wide web and look at what people are saying about your company. You have a vested interest in public opinion and while it's a double edged sword, I believe if surfed correctly and 'the noise' is pushed to the side, it's of great benefit to gauge your investors thoughts. Sterling is 100% correct in advising us to not let these things distract us from the larger picture. With this or any other investment emotion is your worst enemy. Panic buying and selling is a horrible way to trade. That being said, a person could make a lot of money learning the psychology of said investors. I was absolutely sure there would be a sell off on Friday after the letter was released because of short sighted, emotion driven holders. It's only natural to panic about money. As a result I sold half my position in the open, waited for a particular percentage drop, and bought right back in for a very nice accumulation of shares.
If you are playing with money you cant afford to lose, my best advice to you is stop playing. If you cannot step away from the emotions the market brings out, then for the benefit of your general health and your personal life, stop playing. I am not in any way trying to preach or tell anyone what to do, I have seen investing destroy many people fiscally, emotionally, and personally and would not wish that on anyone.
I have my own thoughts on the direction GrowLife will go as it grows. Make no mistake, GrowLife will grow and fast. I'll share these thoughts one day but I believe GrowLife will one day be one of those companies people say "man I wish I had invested in XYZ" or "Man, I had shares in XYZ but I sold it all". I believe GrowLife will be the first publicly traded marijuana related company to be on NASDAQ or another big board. It will likely take a minimum of three years for that to happen, but it will.
As always, trade and vote as YOU see fit. Don't simply take mine or others word at it. Take the time to research, reach out to investor relations, look into the backgrounds of leaders, this is all part of making a sound investment not driven by emotion. It's the difference between those who invest emotion vs. study. Don't look at today, look at yesterday and tomorrow. But above all else be honest with yourself and with others.
***One side note, again this is might just be me, but when I read "we urge our shareholders to resist the artificial force of fear in the marketplace that seek to make incremental profits by shorting and thereafter spreading misinformation to engender fear and instability." This sounded like prophetic words to me.***
