Well… it has definitely been a rough October and November for Aphria shareholders. Really should’ve known better to have sold before legalization but it was easy to get caught up in the rosy images of financial freedom and huge profits. Since then it has been a rough ride down and last week we got smoked with a short report from Hindenburg Research. I have never heard of them before this, but will definitely remember them from now on.
I have no idea if their claims are correct or not. I’ll admit they do paint a terrible picture and based on they way they provided the information, it does leaves some questions out there.
I was impressed with all the research that Reddit managed to do to debunk some of the claims by Hindenburg, but I was really hoping to hear something directly from Aphria.
Unfortunately, we haven’t heard anything substantial. This is what we’ve gotten so far:
- Special Committee to review their LATAM acquisitions.
- A line by line rebuttal may be released as early as Wednesday (2 days ago)
- The rebuttal is now going to be released once the special committee has finished reviewing the acquisitions.
- And a nonstop stream of hungry lawyers calling for investors who have lost money to join in on a potential class action suit against Aphria. I’ve counted at least 20 different firms filing for security fraud.
- And… Aphria is cutting ties with their own lawyer.
I’ve never been stuck owning a stock in a situation like this before. It does seem concerning that they are taking so long to respond to the short attack, and had to delay it to to continue their review. However, with the number of people ready to sue them, they better be damn sure they got their facts right.
I suspect there is probably some gray area business that has taken place and they have to make sure that they go through everything in a lot of detail to make sure they were on the correct side of the fuzzy “ethics” line.
Value wise, assuming all their operations are true, their books aren’t cooked, it appears to me that they’re still a valuable company and not going to go to zero. But what do I know… I’m just some retail investor that was trying to get greedy on the marijuana gold rush and got caught with some drama stock.
Chart wise, we had a little bit of a rebound day today, and well, if it holds as a higher low, perhaps we can start working our way back to the prices before the short attack. We’re riding on the edge of the 1-std dev
Current risk of the position: Bad news, we shit the bed next week, I finally lock in my losses and try not to let it ruin my Christmas
Potential reward: Well..reward is a long ways away, but I did pick up some cheap calls last week and hopefully if we do get some good news and things aren’t as bad as they seem, that we bounce back towards $10 before the short attack.
Back to the basics
Well… it has definitely been a rough October and November for Aphria...