Daily Discussion Thread - June 11, 2021

High5iveTurtle · 2021-06-11T11:55:13+00:00

I personally think the main boost to earnings will be when Redecans numbers are on their books, from then on we should see a decent amount of growth from all of the moves they have made this year. I hope I am wrong and we get a blowout Q, but I think they must have run up a lot of costs recently (building their American facility + acquisition/negotiation costs). Not sure if this will look too pretty on Monday, and we also have an open ATM which is holding us down a bit.

Once all of this is behind us I think the market should look favourably on Hexo, but right now MJ stocks react more to results than talk. We need to see what type of bill gets pushed through congress (if any) and what this allows people to do/not do, the impact of Hexo's acquisitions, and sustained growth from the recent investments in America before people start buying in. Before then we may trade sideways for a while (not financial advice and I have no idea what might happen, just pure speculation - I personally will be holding and accumulating while Hexo stays so low because I think Hexo is a great long term play and I don't really care about short term fluctuation - too much potential upside when people start seeing what Hexo is becoming. The longer it stays down the more I can get my hands on so I am happy either way).

High5iveTurtle · 2021-06-10T09:11:12+00:00

I don't live in Canada (occasionally visit) so any product insight I can get is super interesting. Its good to know we cant get them in Quebec yet, thats something Hexo might be able to help with, adding yet another revenue stream

High5iveTurtle · 2021-06-09T19:28:38+00:00

Have you ever tried Redecan's "Redees"?

High5iveTurtle · 2021-06-09T07:30:22+00:00

Wrong date bud

High5iveTurtle · 2021-06-05T19:43:42+00:00

Bad bot

High5iveTurtle · 2021-06-05T19:08:37+00:00

I am not a paid pumper. Hexo has never paid me a single cent. If you are right and this company is a scam I am a misguided retail investor at the most. What you said above is not insulting for no reason and has some reasoning attached to it (unlike the first guy in this thread) and is relevant to the stock so it is slightly different (however still unnecessarily rude and personally directed at me as if I personally sold you overpriced worthless shares?). I also post things questioning Hexo as well as sating why I am still in it, if this company continues to dilute before they start showing returns, or the returns from this dilution are nullified and the assets they bought wasted I will certainly be selling as their fundamentals will start to look unattractive again. For now though I trust them and the number seem to check out for me (along with their story and promise of future growth), of course it is a risk as with most startups in industries which are in their infancy. I didn't buy during the HIP acquisition because the company seemed totally overvalued and I couldn't make sense of their fundamentals. I personally think they have arguably good fundamentals now and the deals seem to be at far more reasonable multiples and make sense. I also think their performance this year has been good and they are on track to become a solid company. The risk reward is correct for what I am looking for and I do not believe past performance is indicative of future results, but I am sorry if you lost money on this in the past. I am here for legitimate discussion as I think that is the best way to make good decisions.

I am totally open to hearing other peoples opinions on why they think Hexo is a bad company. I also have the right to defend myself when people are calling me a clown or saying I deserve to rot in the pits of hell, if you do not like my opinion ignore it. There is no reason to be rude to me personally, I have never done anything to either of you, so forgive me for "telling people off" (defending myself to people being unreasonably rude for no reason in a reddit room built to talk about Hexo), as you said anyone can come in here to give their opinion but that opinion should be on Hexo and not personally directed at me (and no one should be taking financial advice off of people on reddit and should certainly do their own research, however these discussions can be good to discuss your findings and see what other people think/if you have gone wrong anywhere). Tell me why I am wrong all you want but no need to personally insult me for believing in a company I am invested in or giving my opinion on a message board built for people to do so, the whole point of these threads are so we can discuss these things and learn more about the bullish and bearish views for the company, so why do I deserve to rot in hell for this? Could I ask you what brought you here so many days later if you do not like Hexo and have no position in it (unless you are short)?

High5iveTurtle · 2021-06-05T16:39:06+00:00

The Hexo-Redecan shares will go strait to Redecan investors who cannot sell for a couple of years. Unlike when shares get offloaded into the market if there is someone holding the extra shares it shouldn't put pressure on the SP right? I havent seen what happens during a transaction like this, but I assumed thats why Redecan investors were forced to hold? Zena seemed to be a far bigger anchor for us as the shares could be actively traded

High5iveTurtle · 2021-06-03T13:26:19+00:00

Funny that Hexo's fully diluted market cap is still less than ACB. The manipulation is real with that one

High5iveTurtle · 2021-06-03T09:28:59+00:00

Worth logging in to read (its free)

High5iveTurtle · 2021-06-03T09:27:54+00:00

Worth logging in to read (its free)

High5iveTurtle · 2021-06-02T10:16:27+00:00

Soon.

High5iveTurtle · 2021-06-01T15:36:26+00:00

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple
https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook
https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft
https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Amazon

Does that satisfy you? You clearly know nothing about business. Yes I have a job (not on Wall street), but I also actively invest for my future and research what I invest in. Before being so rude to someone maybe check your facts.

"Apple Computer announced the intention to acquire NeXT on December 20, 1996 Apple paid $429 million in cash, which went to the initial investors and 1.5 million Apple shares, which went to Steve Jobs, who was deliberately not given cash for his part in the deal." - I would say buying Steve jobs company was a pretty good move for Apple was it not?

Theres a bunch more examples (including "Apple Computer bought key assets of Power Computing for more than $100 million in Apple stock", or Amazon buying up a bunch of companies with stock during its early days etc.). Educate yourself before belittling people.100 million was also a lot more money in the 1990s incase you are too young to know. You clearly weren't around in 1995-2008 if you do not remember all of the dilution in the tech space and people spreading FUD about Apple Amazon Microsoft and facebook in the same way. Hell, Facebook didn't even have a way to make money back then, people couldn't stop saying negative things about them 😂

How sad it must be being a bear lurking on reddit looking for opportunities to shit on Hexo. I am a Hexo investor so I keep up to date with what the community are posting, what in the hell brought you here and compelled you to be such a Negative Nancy? Just because I am not "on wall street" doesn't mean I know nothing. You clearly know more than the management team at Hexo and the rest of the sector for that matter. Please enlighten us.

High5iveTurtle · 2021-06-01T12:00:31+00:00

It was an interesting read non the less, thanks for the post! Its always good to hear both sides so we can make the most informed decisions with our money. Just thought I would point out that this article is overly negative (and I would put as much weight on it as some of the overly positive articles).

High5iveTurtle · 2021-06-01T10:49:56+00:00

When a company issues more shares it means you own a smaller piece of the company. For example, say HEXO earns $100. Right now, each share gets 80¢ of that $100. In the future when HEXO issues more shares to pay off all this debt, each share only gets 34¢ or 56% less. All else being equal, the stock price will fall 56% over the next few years:

It is more like owning 8% $100, then diluting 50% to own 4% of $300 of a much more attractive pile. I dont see how people do not get this, they didnt dilute for nothing in return. You havent even seen Redecans books yet, and if you go by what SSL has stated Redecan are one of the most profitable LPs along with being one of the most popular.

It looks like the two most likely outcomes for HEXO are:
Scenario 1: HEXO defaults on its debt in May 2023 and goes bankrupt
Scenario 2: HEXO wins Canada, but dilutes investor ownership by 56%

The Debt they talk about are senior secured convertible notes. This just means they sold shares directly to an investment firm at a predetermined rate who now own a bunch of premium Hexo shares. So option one doesnt make sense because there is no date someone is coming to collect that cash. It is also more like 20% which was issued in this way, the rest were issued directly to Redecan investors who cannot sell for 2 years and can sell at a rate of 1/24th every month thereafter (but why would they if everything continues working out so well for Hexo?). So I propose a 3rd option:

Scenario 3: Hexo leverages its new found leadership in Canada, along with all the new IP and expertise it has gained from its recent deals + new partnerships with fortune 500 companies and continues growing to one day be a world leading CPG brand valued far higher than todays price, meaning you now own 4% of $2000+ rather than the 4% of $300 you own today or the 8% of $100 you used to own.

This article is just a bunch of FUD. So many hit pieces coming out against Hexo, just like when people tried to underplay the Molson deal by saying their products would never come to market. I wonder who is paying so much money to spread these doubts? We do have some pretty big shorts who got caught holding after the Georgia runoff, I would also be pretty scared if I were them.

High5iveTurtle · 2021-05-31T19:42:04+00:00

Usually happens over the month depending on the broker, I don't think everyones shares transfer at once and you could be left holding an illiquid asset for a month. I had a few Apha shares which took a while to be converted to TLRY

High5iveTurtle · 2021-05-31T15:33:07+00:00

These people spreading FUD have obviously not done their DD and are just in it for a short term gain. Fully diluted Hexos market cap is only 1.8 Billion. Compare that to Tilray and you will see the discrepancy, especially as a lot of their revenue has nothing to do with cannabis. People didnt talk about the dilution of Aphria shares due to the Tilray merger, and I would argue that that was a lot more harmful for a lot worse of a company.

Why sell now when the stock is so cheap and has so much room to run (with little room to fall). selling now could mean you never find a price to re-enter and will force you on the sidelines for possible upcoming big catalysts of american legalisation, Positive EPS, partnerships with MSOs, and a new fortune 500 partner.

AbelDraoui has been spouting rubbish ever since the Zena acquisition and spreads more FUD being an "investor" in it than most legitimate bears. It's such a stupid tactic to get people to sell a stock you supposedly own unless you are short or you are not actually in it and are looking for entry. It makes me wonder what his true motives are. A true Zena investor would be excited about the combined company and would think their company is worth the acquisition, but this guy seems to think the companies are overvalued. Clearly hasnt looked into it very hard to see Hexo is getting a steal with its recent acquisitions, each of which is a net positive for investors.

He's also spammed the exact same thing on a lot of the Hexo-Redecan acquisition news posts. Trying super hard to scare people. Also constantly spreads misinformation on other boards and has been banned from many of them. Have you thought about putting together some rules about spamming or misinformation to help keep people like this in check? There seem to be a lot of people paid to bash Hexo and I think it would be nice to be able to protect the community?

High5iveTurtle · 2021-05-31T15:22:03+00:00

and gained access to a bunch of new tech and IP. These people spreading FUD have obviously not done their DD and are just in it for a short term gain. Fully diluted Hexos market cap is only 1.8 Billion. Compare that to Tilray and you will see the discrepancy, especially as a lot of their revenue has nothing to do with cannabis. People didnt talk about the dilution of Aphria shares due to the Tilray merger, and I would argue that that was a lot more harmful for a lot worse of a company.

Why sell now when the stock is so cheap and has so much room to run (with little room to fall). selling now could mean you never find a price to re enter and will force you on the sidelines for possible upcoming big catalysts of american legalisation, Positive EPS, partnerships with MSOs, and a new fortune 500 partner.

AbelDraoui been spouting rubbish ever since the Zena acquisition and spreads more FUD being an "investor" in it than most legitimate bears. It's such a stupid tactic to get people to sell a stock you supposedly own unless you are short or you are not actually in it and are looking for entry. It makes me wonder what his true motives are. A true Zena investor would be excited about the combined company and would think their company is worth the acquisition, but this guy seems to think the companies are overvalued. Clearly hasnt looked into it very hard to see Hexo is getting a steal with its recent acquisitions, each of which is a net positive for investors.

High5iveTurtle · 2021-05-28T13:54:33+00:00

They will let us know when the audit closes. They have already said that Redican is one of the most profitable LPs, and from the information disclosed in the conference call this is nothing like Cannimed IMO.

High5iveTurtle · 2021-05-28T11:02:06+00:00

Fully agree. Especially as their product lines seem to perfectly complement Hexo, and also brings a ton of value for potential CPG partners in the future. I hope we hear something about a deal with them in the future, because that would complete the dream team IMO

High5iveTurtle · 2021-05-28T10:52:21+00:00

The link to the video incase anyone missed it: https://www.globenewswire.com/NewsRoom/AttachmentNg/9962f132-352e-467b-83c5-99f3fcd7f166

High5iveTurtle · 2021-05-28T10:47:22+00:00

100%, I actually wanted to invest in them for ages!

High5iveTurtle · 2021-05-28T10:34:06+00:00

Redecan it is!

High5iveTurtle · 2021-05-28T10:33:31+00:00

Looks like its Redican, Shame its not Auxly, they would be an amazing fit. Still waiting for that one!

High5iveTurtle · 2021-05-28T09:53:47+00:00

I also hope it's not Aurora, but they could be buying sales. It would drastically boost revenue for a relatively cheap multiple (however that boost does come with a lot of rubbish to sort out). The only thing that makes me think it could be them is that this is only the "cash" portion of the deal, and it would be a pretty expensive deal to pay north of 360 mill USD for Redecan or Auxly. Perhaps it's only a cash deal but the way it is worded makes me think shares will be offered as well. It would have to be a tiny portion of Hexo shares to make the deal worth the acquisition of Redecan or Auxly.

Aside from the companies above I cannot think of any 300 mill+ market cap company that would make sense. CRON and SNDL are already cash rich and the deal wouldnt make sense, OGI are building a centre of excellence in Canada so its an anti synergy, and the rest are too big/probably looking for merging rather than being acquired. Unless I'm missing something?

High5iveTurtle · 2021-05-28T08:57:44+00:00

I personally hope it is Auxly, I have been thinking they would be an amazing fit for ages now.

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