Featured

The Trade Of The Week

Boeing Calls suprised on Friday. The stock dipped at 10:00 a.m. So did the Boeing "at-the-money" Calls at that exact time. I often talk about Boeing options, most usually in the context of purchasing one week out Call options on Boeing at 3:59:56 p.m. or 3:59:57 p.m. on Fridays "at market" looking for jump upwards on monday mornings. I also note that 10:00 a.m. as well as 12:00 a.m. are commonly periods of time in the trading sessions where reversals in stock prices can take place. This phenomena is not an illusion. In this instance, there was an opportunity to pay $20.00 per contract for one day Call options on Boeing that were expiring that day which ended up closing the day at $990.00 Your timing in doing this had to be spot on. In all fairness it is not everyday that Boeing jumps up almost 5% in one trading session. Call options on Boeing at that time which where "out-of-the-money" had even more extreme upward moves. I don't want to bore you howe...
Post a Comment

Sundial And 2.4 billion Shares Outstanding

Back in 2019 when this Canadian stock went public (Symbol SNDL) it traded for eight dollars a share. It didn't stay at that price level for very long. Look where it is at now and look at how it continues to slide downwards. Does it look like its going to turn around in the near future? The companies CEO seems to think so given what he says but in 2021 they lost $232 million and their sales were flat. It'a Calgary based company with 580 employees (2021) trying to dance to the changes in the marijuana industry. You see marijuana companies are scrabbling to find new ways to sell their product. Growing it is now not the issue. Being able to find channels of distribution to move the product is now the difficult part. Everyone talks about building "brand recognition" but for a number of reasons including packaging and advertising restrictions it's difficult to differentiate yourself from your competition. Thank goodness for most major growers, in this industry the "buy local" mentality is not prevelent. Many of the smaller companies which are hanging on by the skin of their teeth claim to be "craft growers". Beware, such claims run shallow. There is a glut of weed forcing many of the smaller players out of business. Turf wars in a attempt to become regional retailers are now the norm. Kioks selling the stuff have come to shopping malls. Buyers show little brand loyality as product offerings by individual companies are in an ongoing state of flux. Manitoba will now be allowing mobile trailers too sell weed at outdoor summer music festivals. Marijuana also now grown in every 15th or 20th backyard in Canada and is found drying in sheds in the winter all across our nation. Even seniors are growing it and giving it away. The company Sundial is in this space and it has had a wild ride.
Now read these two stories. The first is about past trading patterns and a second story about a late filing incident.
Now I want to point out an issue they are running into about being listed on the NASDAQ.
If they do a reverse split a 2 for 1 split it wouldn't be enough. A ten for one reverse slit is more likely however the markets have not being kind to marijuana companies in the recent past doing reverse splits. A twenty-to-one or fifty-to-one reverse split is something that is really needed. They can't afford not to be listed on the Nasdeq and I don't know why they are not more proactive addressing this issue. In 2021 they lost $232 million on sales of 67 million or .12 cents a share. In 2020 they lost 73 million and in 2019 they lost 66 million. These are huge losses. Yet it is reported that they have over one billion dollars of cash in the bank and have an operating arm which invests in other marijanna companies. How is that strategy working out for them? Well it is reported that the operating arm has lent out $400 million and they have mentioned "Village Farms" and "Valient" as two of the companies they are lending money to. Both of these companies are doing poorly "year-to-date". That doesn't augur well.
Here is how Delta 9 is doing.
Last year Sundial got into the Alcohol business adding more than 170 liquor stores to their portfolio. They did this by purchasing a company named "Alcanna". More money spent. They are good at doing that. Will this help to put this company on more solid ground or will it keep running around like a chicken with it's head cut off? I note that in 2021 on "Sedar" website (which all investors should use as their bible) there were over 50 entries material developments that Sundial needed to report. That's a high number. After reading all of this your probably wondering how they have managed to have over billion dollars in cash (and no long term debt). Read this. They have a history of going to the markets for more money. Here is one such example.
Why are investors so willing to buy into these new issues? One of the reason is the issuance of warrants and the dream by investors of having this free side bet. In this case it is a five year option to buy more of the stock at $1.10. Finally, not suprisingly options trade on this stock! Talk about scary. I feel that options on stocks in this price range serve no real purpose and I feel our regulators are turning a blind eye on all of this speculative activities. Fifty cent stocks should not be allowed to have options on them. Yet having said this, look at the "open interest numbers" on this January 2023 series of Calls!
A final note. Do your own homework on this one. This company has a history of disappointing their shareholders. * An August 22nd Update. A big fish is buying out a small fish.This may be smart move.
The Sundial storey never seems to end.

Comments

Post a Comment

Popular posts from this blog

A Fireside Chat - One Year Options and Thirty Day Options. Which is Better?

Image
Some say to think small, not big. Trying to play Disney options is thinking big. It is a stock slightly out of favor. If we start with it's a three year chart, we will see it is down by about 50% over that period of time. Now it's one year chart. If the stock can break 110 in early 2024 the sky is the limit. It does have a lot of moving parts so anything could happen. Look at these Calls options one year out. One year in options buys a lot of time.They look reasonable. If the stock ever inched up to the $105.00 price level in the three or four months these options would jump up in price by about 50%. Even more if they had really good news. Yet it's the "what-if" aspect of the equation that castes such a trade in doubt. "What if" stories just don't cut it. There are to many variables in play. Then again, why are we even thinking of long-term Call options after a December's rally? Let's switch gears. If consumers are out spending for X-ma...
Read more

Waiting For A Drop On The Opening On Bad News - Eli Lilly

Image
Here is the bad news. The company is Eli Lilly. How bad is this news? Well look at it trading in the premarkets. So what do I think? I think the news is a setback of sorts, but not really all that bad. The stock is going to open lower, that's a given. It's like trying to play Boeing after an announcement that an airplane has crashed. So the stock is going to crash and it might have a small rebound and then it's going to slide down some more. A test of sorts will happen sometime in the afternoon. It might stock falling but then where will it go from there? The best case scenario is a recognition that investors got it all wrong and the stock ends up flat on the day. Yet there might be more of a downward dumping of the stock on the close followed by a selloff on tomorrows opening. Should option players be jumping in to play the upside on next week's Calls? That is the question. Here is a look at Boeing on the days after a crash. Day two after the crash was equally as ...
Read more

Another Blog On "Vinfast"

Image
There is so much to read about this companies history online. Do your own homework. Their success is not dependent on what ends up happening with their sales in North America. They are nimble. There are plenty of auto factories all over the world now for sale they can acquire. They have dabbled in Australia. Having access to money to keep going doesn't seem to be their problem. Rivian also seems to enjoy this advantage. Vinfast is currently building a new plant in India which could employ thousands of people. That's an emerging new market. New relationships are being built and new investors will be coming onboard. Are option players looking at this stock? Not really if we look at these "one-month-out" Calls. What about Calls further out? What about next January? Here is a look at the three and four series of Calls. Nobody seems willing to bet Vinfast Calls. Now this. Here are two snippets taken from a blog I wrote about this stock back in early December of 2024. ...
Read more