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The firing of Hexo's CEO...thoughts?


JP
 JP
(@jpynestergmail-com)
Eminent Member
Joined: 4 months ago
Posts: 38
Topic starter  

What do you folks think of this move? A shareholder's letter led to his firing. Crazy. I'm thinking the replacement will be Pete Montour. Keep Trent where he will best serve this company at the moment.

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D. H. Taylor
(@cannabisinvestingnewsletter)
Member Admin
Joined: 1 year ago
Posts: 260
 

Pssshhh... I could add a few other companies to this list.

Thing is, the two acquisitions will mean more growth.  HEXO has cash sitting on about 65% cash:debt ratio.  So, they can afford to float these two acquisitions for now.  I know 48North was not profitable going in to the deal and I think Zenabis was close.  So, I am not certain this in itself was a solid reason.

But, according to the response of the Board, they were looking towards the next stage of the company.  Their most recent numbers saw a drop in revenue and some ugly numbers on EBITDA.  

They need to focus on organic growth with the core assets they have right now.  If they were to achieve EBITDA positive quickly, say in 2-3 quarters, with all three parts of the business, then moving forward this could be very positive.  New management will need to focus on growing that organic growth; this may be the new direction they are focusing on.  

But, to simply oust the CEO?  Something tells me we don't know the entire story.  

Keep in mind, cannabis is increasing revenue at about a 7.5% rate of growth with revenue QoQ.  In one year, four quarters, this would equate to about a 50% increase in revenue.  Trickle that through in the financials and you start seeing metrics that are increasing.

But, that is the whole of cannabis.  Hexo just printed negative revenue growth.  THAT might be the story we are seeing play out.  


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JP
 JP
(@jpynestergmail-com)
Eminent Member
Joined: 4 months ago
Posts: 38
Topic starter  

Former Truss Beverage Exec Scott Cooper as the new CEO and President. Feels like Molson just took over without officially doing it. Let's see how this plays out.


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D. H. Taylor
(@cannabisinvestingnewsletter)
Member Admin
Joined: 1 year ago
Posts: 260
 

So, to summarize what just happened, Molson flexed and wanted a "Team Player" in the driver's seat.  

Interesting.  

Still, Hexo is set to become a powerhouse if they hit their $4B revenue projections.  


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