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$1.10 candy club holdings limited

Ann: Quarterly Activities Report & Appendix 4C, page-34

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27/01/21

21:03

Post #: 50484149
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Originally posted by fareki: ↑

Easy answer to your question,

Because Candy Club, and other small players, are taking a piece of the pie. Why should that $15M, $30M, $150M annual revenue for some of these small confectionary businesses stay with these small players, when the big companies can simply buy the company, continue this niche more boutique offering and capture more of the market while removing competition?

On a financial front, it is simply cheaper to buy a company of this brand awareness, growth, b2b customer base, than it is to start from scratch and compete with existing small players in the same space for the same revenue - that is indeed why M&A ever exists. Synergies.

I leave you with these words: They 100% can produce the same candy at a much cheaper cost, that is why they will acquire CLB, produce it themselves and have great margins, while capturing this revenue from high retention b2b customers in a fast growing space - more boutique-like candy.

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So, your argument is - these larger companies, are simply too lazy to start a new product line.

And it's cheaper to let another player build into the space, and acquire them at a premium - I disagree with this thesis.

I understand that mindset if it's a niche product, or new market - just don't see how its applicable here.

CLB Price at posting: 16.0¢ Sentiment: Sell Disclosure: Not Held
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