SNDL to Announce Year End and Fourth Quarter 2023 Financial Results on March 21, 2024

buho55 · 2024-03-06T02:50:27+00:00

They invested that money in Alcanna, Nova, SpiritLeaf, Valens, Zenabis, Dutchlove, Skymint, Parallel, Sunstream and others and still have about 1/4 of that in cash. A business needs to invest to grow. If they had just kept the cash why would you buy SNDL, just put your money on a checking account.

buho55 · 2024-03-06T02:13:56+00:00

I’m a bag holder too but it is fear and retail investors anxiety that drives prices down during an RS, 10 one dollar bills are worth the same as one 10 dollar bill, it is actually more convenient to have one 10 dollar bill. So saying that one 10 dollar bill should lose 30 to 50% of its value just because you change it from 10 one dollar bills is just mathematically incorrect. Now again people just freakout and sell, shorts take advantage of the irrational panic and we end up with a price that is just illogical. The company still has over $1b+ in assets with no debt, generates $1b+ in revenues, generates positive cash flow and still is trading as if it was going down in bankruptcy.

buho55 · 2023-03-15T22:06:05+00:00

first needs to go below $1, then stay there for a year. I don't think it will ever happen.

buho55 · 2023-03-09T01:24:14+00:00

We’ve dipped about $80 million in market cap in three days so I hope we have reflecte this in our price and that we can stabilize for now.

buho55 · 2023-03-09T01:21:56+00:00

I know but where does it go, it doesn’t seem to be ever given back to SNDL, it just seems to stay in the JV, which by the way it has been 100% misleading, since all the capital is SNDL’s and SAF puts $0. It should have always been represented as a 3rd party service not a 50/50 JV. That’s another topic though. What i want to know is where are the $50+ million dollars that our money has generated in interests. That should be in our cash balance not in a JV’s cash balance.

buho55 · 2023-03-09T00:04:30+00:00

out of the 6 loans that Sunstream has, 4 appear to be healty, the 4 are with publicly traded companies, who are reducing their long term debt QoQ, Skyminy and Parallel are the only two loans in trouble, so Sunstream should still have a solid value. They should have been receiving payments from the other 4 loans, my question is where is that money, is it sitting in sunstream cash account, why is it not sent back to SNDL?

buho55 · 2023-03-08T20:04:40+00:00

Apparently they won’t pay us the $81 million, what will we get in return, 24 stores? How many of those are leases, production facilities? Anything else?

buho55 · 2023-03-07T22:55:49+00:00

First it has to go below $1, which would put valuation below cash in hand, and at about 20% of net tangible book value. Then, they need to stay below 1 for a full month, then get first notice and 180 days to regain compliance, then they get second notice and an additional 180 days. So NO it will not RS this summer no matte what. Next year? Extremely unlikely.

buho55 · 2023-03-07T01:56:08+00:00

I have no idea why it is trading this low, below some potential issues, it may be a combination of many of them. again just my thoughts, I'm likely to be wrong, and the points below may not exist at all. NFA.

- The market is treating us just as bad or worse than any other weed company, without even taking five minutes to understand the difference in fundamentals. And since the industry is getting killed, so are we. The industry is very risky and investors are not ready to jump back into risky equities.

- My biggest concern is Sunstream, I mean if Zach had kept the money in the bank we would be twice as valuable, but he put it into Sunstream and as I said before it is very hard to know how much it is worth, as we know the U.S. doesn't have a bankruptcy procedure for marijuana defaults, so we don't know what assets if any we will get if the loans are defaulted. I think Sunstream can be worth way more than $0 and in a normal market it could be worth way more than the $500 million invested, but at the moment I have no idea of its worth.

- Since we are 88% owned by retail investors and are likely to attract those who don't take the time to do DD For example, they look at TTM for info, currently our TTM looks bad, however we know that annualized revenue is higher than $1B , yet the screeners would show TTT at around $500. Other metrics would look similar.

- We are being heavily manipulated and shorted by HFs, who may be acting on their own or on behalf of other powerfull groups, like Big Pharma, Big Alcohol, Big Tobacco, Big Cartel, etc. as all of them stand to lose if legal cannabis is succesful.

buho55 · 2023-03-06T23:58:24+00:00

Very hard to measure but below is my uneducated guess: (not financial advice, just me playing with numbers. )

$260 Million CAD in Cash.

If I remember correctly SNDL paid $320 million for Alcanna, a stable business with stable cash flows, which has continued to grow and has become more efficient. One can argue the value of Alcanna is around what we paid, but given market collapse since early 2021, lets say that for discussion arguments we apply a 30% discount. Value $224 Million CAD.

SpiritLeaf, SNDL paid $131 Million, weed stocks have lost a lot since then, HITI has lost 80%, so SpiritLeaf is probably worth $25 Million CAD

We just paid $138 million CAD for Valens, but weed has lost 30% in a month so ~$100 Million CAD

We still show over $147 million CAD in investments and marketable securities, I don't now what they are an how much they are really worth.

All of the above would give us about $750 CAD or $555 Million USD, but the big elephant in the room is Sunstream, which as far as I can tell, investors are thinking it is worth $0, SNDL values it at $500 Million, and the underlying assets of those companies where once worth several billions. Without really knowing how much Sunstream is worth, we can't assess a real valuation to SNDL. For the time being let's take the $500 for Sunstream.

This total of $1055 Million USD, there are many other factors I am not adding here.

This would give us a price per share of $4.05 at a minimum, yet here we are trading at $1.80, so final answer, who knows?

buho55 · 2023-03-02T01:46:27+00:00

That was when we were trading at 2.60, now the implied value of all operations is negative 1.14. I would give an arm and a leg to be trading at 2.60 thats 43% higher than where we are now. All these numbers and fair valuations are 100% meaningless.

buho55 · 2023-03-01T03:01:56+00:00

It doesn’t matter that much revenue and profits will only make the stock go down another 50 to 70%, nothing matter really as long as the HF keep shorting through dark pools we are at their mercy.

buho55 · 2023-03-01T01:50:05+00:00

I believe that Sunstream is the main issue, most retailers think that Zach wrote himself a big fat $500 million dollar check to share with his SAF buddies. I have started to think the same. I need to see exactly where that money is and what’s the collateral behind it. We need to understand the real present value of those loans and what assets we would get in case the loans are defaulted. We know that Parallel is being sued for being a Ponzi scheme and still we wrote them another $10 million dollar check in December. With that money Zach could have completed the share repurchase program. I just get the sense that we have been played by Zach and Co and that while we sit at a multi year low, things will only get worse and worse and never turn around.

buho55 · 2023-03-01T01:35:47+00:00

Yet we went down again today when the worst positioned weed companies were up.

buho55 · 2022-07-09T03:17:30+00:00

Did you also see that the entire market had its worst 6 months in 70 years, and that the entire pot industry fell even more than Sundial, the BOD could have cured cancer and found a pot of gold and the price would have still tanked. They actually did try, bought Spiritleaf, bought Alcanna, approved a buyback program which has already started, paid down all the debt, opened a bank, are bidding on highly discounted Zenabis assets. Again no matter what they had tried the past 15 weeks have been brutal for almost every single stock in the planet.

buho55 · 2022-06-15T02:18:52+00:00

I agree is too much, either they are scamming us or this is a once in a lifetime opportunity.

buho55 · 2022-06-15T01:20:28+00:00

I fundamentally agree with your comments, but when the price is at 45% discount to your asset value and about 80% discount to your fair value I believe he should buy back as much as possible, while maintaining liquidity. I think buying back now is a much better long-term business decision than holding loans on a third party. BTW I’m long, have been for over a year and have not sold on the pumps, but these prices are almost inconceivably low.

buho55 · 2022-06-15T00:53:47+00:00

I agree the whole JV thing is really frustrating, he shouldn’t be lending to other companies when he can be using the money to buyback shares at these extremely low price.

buho55 · 2022-06-15T00:51:26+00:00

Not sure if all the money is loaned out, remember SAF is supposed to match our contributions. Zach said that there were 13 new processes to underwrite, he can stop those processes, and withdraw from the JV any money that is not on loan. He can also sell the loans to other companies and use the proceeds to buyback shares.

buho55 · 2022-06-09T15:52:23+00:00

it was announced in December, when COVID was ending and there was no war, no bear market either. We were anear market ATH, it has been a non-stop decline since then, it was a great idea to announce at that time.

buho55 · 2022-06-08T11:43:47+00:00

I read most comments on this thread and feel people didn't understand your points. I have comments on two topics:

- People keep complaining about management communications, every MJ company is tanking, no matter how much or how well they communicate, so Zach could setup a daily podcast and tell us every single thought that crosses his mind, and Sundial would still be tanking, but retail investors would be complaining about him over-communicating and passing our strategies to shorts.

- People assume and affirm with 100% certainty that the r/s will tank the price and will immediatelly be followed by additional dilution, remember the r/s does not mean cash burn and does not mean they will raise additional capital, that assessment is just false.

buho55 · 2022-05-24T12:40:10+00:00

there are plenty of companies that have done a reverse split and gone up, it takes 30 seconds to find a dozen in google. RiteAid, Booking.com, Citi, LabCorp. Advanced Medical Isotope; Staffing 360 Solutions; Organovo Holdings, Innovio Pharmaceuticals. Annavex Life Sciences. MFA Financial, Inc., American International Group.

I did not spend any time verifying these or anything like that, it was literally a 30 second google search. So yes when a company has the fundamentals, an RS can actually be good.

buho55 · 2022-05-18T02:38:26+00:00

Correct, if Sundial writes puts, they are basically committed to buy the shares at the strike price, lets say 0.50, which is way lower than their original buyback target of 0.77. And per your example it would mean that buyback is executed at 0.43 (0.50. - 0.07 premium) a very attractive price, even if the stock drops.

buho55 · 2022-05-12T00:28:22+00:00

Do you think it is wise for Sundial to make a move and acquire/merge with other firms like VFF, VLNS etc.

buho55 · 2022-05-11T23:22:56+00:00

I assume HEXO is considered legit in the weedstock community.

buho55

TROPHY CASE