The recent drop in share price was understandable because of the 140m offering and securing 360m in debt both of which are being used to acquire Redecan which is an extremely popular LP in Canada
from the Q3 financials
Under the terms of the Share Purchase Agreement, the $925 million purchase price will be paid to the Redecan shareholders as $400
million of consideration due on closing paid in cash and $525 million of consideration due on closing paid through the issuance of
HEXO common shares at an implied price per share of $7.53.
Hexo continues its aggresive growth in the Canadian sector with footholds into European and US cannabis markets.
Redecan adds a strong brand recognition, leading cannabis growth, cultivation and distribution innovation and positive cash flows that Hexo was struggling with.
370M Market Cap is well oversold for what I believe is nearing the bottom of Mark down after distribution from the spring months.
I’m not a financial advisor. Not that there is anything wrong with that. This is not financial advice in anyway.
Hexo is a value stock with tremendous growth and future but it also presents greater risk.
I plan on entering a position when i see signs of the next accumulation phase beginning.
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