Canada House Wellness Group (CHV.C), which is a name almost nobody knows, and sports a stock nobody gives a red rat’s behind about, but actually has a Health Canada licensed producer standing, is about to cede to the trade winds and go from a 250 million share structure to a 10 million share structure.
Lorks o’lordy, we like to see this.
It’s doing that because its stock is too cheap to run a financing at currently. To fix that, they’re rolling the stock back 25 to 1.
When that plan was formulated, the stock was sitting at $0.05.
By the time it was announced, the stock was at $0.03.
After it was announced, the stock dropped to $0.015.
Come to me, my lovelies.
If this odious scene seems to your learned mind like a spiral of death, a headlong flight down concrete stairs, a slow motion train wreck – you’re going to want to look juuuuust a little deeper.
This is an opportunity.
That’s one hell of a nasty chart, good fellows, it must be agreed. But this is a licensed producer.
A $2.9 million licensed producer that loses around $2 million a quarter, recently brought in financing of $2.5 million to tide it over (and has access to more), and has just started selling flower, and selling online, and has two deals with Europe, so one may expect that loss to shrink even just a little.
The rollback will hurt them when it kicks in, even though it has already, even though the thing is already insanely inexpensive. CHV has gone from a $10 million value to a $3 million value in a week.
More fun with numerals! In April, this was a $40m company. It has actually progressed since and executed some business and is now at an inflection point, but it hit that point at the worst possible time, with its stock at an unfortunate number and the industry in pain – and now it’s tax loss selling season.
Frankly, I think any shareholder in this company will almost have to sell it to officially rack up their loss and declare it against any gains over the last year, assuming one has gains to declare.
And that is our entry point, my pretties!
I don’t know if CHV’s Abba Medix subsidiary will be successful in selling weed to the provinces, or finding the money to expand like they wanted, or even just bringing enough coin in to get through a few quarters of pain management.
But $0.015 per share?
I know companies right now that are eagerly looking to snap up cheap LPs and this is the cheapest LP. Post rollback, with just 10 million shares out, there will be a lot of stock volatility, and while that normally presents as much risk on the way down as opportunity on the way up, how exactly does this stock go down from a $2.9 million market cap. As a liquidation, you’re going to sell that license for 2x the current value, even if that was all you had to sell.
Rub, my rabid dogs, my harbingers of profit, my hunters of bear. Let us pick up the gold pieces left behind by the less clever and ride that stage to the promised land.
Or ride it to $0.05 and sell it off quickly. Either way.
— Dogsworth Taint Esq.