@kobired, I agree with some of your comments about SOI/Mkt Cap etc affecting potential share price. A good example currently is an ASX bio company (I**) with 4.4BL SOI; was 5.7cnts on 5th Nov and has risen steadily over the past 13 days, to 10.5cents on the back of 3 technical anns and no revenues.
Timing vs sentiment vs environment, IMO. Many other examples are out there.
SOME THOUGHTS ON THE INDUSTRY....
It has been interesting to watch the games being played out with the US elections at the moment. With the possibility of a Biden presidency drawing closer investor confidence in the Cannabis industry has experienced a resurgence of interest. [1] Some of that sentiment has also washed over into Australia's medicinal Cannabis/Industrial Hemp Industry. One month ago Aussie Cannabis Stocks were sitting at -60.8% Yearly Return and of yesterday it had improved with -47.37% Yearly Returns.[2]
The Aussie Cannabis Index also shows a slight rise of confidence around the first election result but has since settled.
I think 2021 will be an important year for Australia in regards to the make and break of the local Cannabis industry. We have seen a couple of casualties this year and some ASX companies have decided to JV or merge to keep their ships afloat and moving forward. Those who have strong business models, can divest to achieve revenue and manage their expense models will survive, IMO.
MANAGING EXPENSES IN 2021 Expense Data Table - ASX Cannabis Stocks Data from ASX Latest Industry Quarterly. DYOR to check figures.
MOVING FORWARD INTO 2021
IMO, the COVID pandemic will continue to affect/drive business confidence/sentiment moving forward into 2021. I believe that some industries will experience surges, some will plateau, and some will saturate/fail.
Companies heavily reliant upon imports only, for their revenues, will also, for the short term, as mentioned at this weekend's ACS, have to deal with high logistic expenditure due to restricted shipping and high transport costs. The result being higher prices on products, lower margins and increased cash burn. Those who can locally produce, export and import (diversification model) will have a better chance of survival in the Long Term. (IMO) Remembering that the majority of companies in the Cannabis Industry are still classified as Micro Cap or Speculative; expense heavy and revenue light.
Members are welcome to agree/disagree, but moving forward into 2021, I believe that those companies who are seen to be managing their income/expenditure models sensibly, with good expense ratios focused towards profit and cash preservation will do well and be supported into the Long Term. I also believe that those companies who continue to burn through tens of millions of investor dollars with no significant ROI may not be here in the next 2 years.
