Welcome to the Cannabis Investing Newsletter Forum. Feel free to find your favorite cannabis stocks and contribute content as you please; content that continues the discussion of and analysis of cannabis stocks. – D. H. Taylor
Hexo Corp and HEXO Stock at a Great Price with Upside Potential
Hexo Corp HEXO Stock dropped significantly in August on news that there was another stock offering to raise capital. Hexo Corp raised some $140M which was about 40 million shares. There were some 150M shares outstanding so this was an approximate 30% increase in shares, diluting current shareholders down by 1/3.
On the one hand, there does not seem to be anyone propping up cannabis stocks right now and that is probably one contributing factor to the stock drop; there simply were not enough bids below the stock price. On the other hand, Hexo stock has a lot of momentum right now with four acquisitions and merges that will propel the cannabis company moving forward.
How does one consider this in the context of an investment? It's not easy. First, you have to look at all potential avenues of where Hexo Corp could be going. Then, you have to consider risks with Hexo Stock. And... it involves busting out the 9th grade algebra that you always felt you'd never need in life. Hexo stock has never been a consideration for me with the my Best Marijuana stocks to buy now. And, I'm a bit leery of considering Hexo as an investment. Then again, how much further could Hexo Stock go considering that they have dropped so much and are poised to grow?
Not a question I want to find out the answer the hard way.
Nonetheless, there is one indicator that does point to Hexo Corp HEXO stock as a buy, which I will get into. If you look at this one indicator alone, and then you consider the future growth of the newly merged companies, while also considering other factors, investing in Hexo Corp is an interesting proposition for some individuals who enjoy the thrill of a little bit of risk.
Thanks for this interesting analysis!
One thing that you didn’t focus on and is in my view a big question mark is how will they be able to digest these three big acquisitions. Have you seen any other player in any other industry making three major acquisitions in three months?, and doing this successfully?, let alone a relatively new business in a new industry and a rookie (though full of self confidence..) CEO that has never done this before..
I think they will screw up these acquisitions, but time will tell. I too am staying on the fence waiting to see where it develops from here.