Supreme Cannabis Company (FIRE.TO)

Supreme Cannabis recently announced a At-the-Market Equity Program that allows the company to issue and sell up to C$30,000,000 of common shares in the capital of the Company from treasury to the public. In general, when you see something like from a small cap high volatile company, should this be received by investors as an indication the company is not doing well – i.e. needs to free up some cash to pay debt?

Marked as spam

Asked on March 4, 2021 8:53 am

0 views

▲

▼

✔

Private answer

Hi there,

The funds can be used for multiple different things - debt repayment, acquisitions, operations, expansion etc. There is no hard and fast rule here. Typically, with small caps you want to ensure the money is being used to grow the business. FIRE does have a pretty high debt load, so using proceeds from an offering to pay down debt may be a good thing.

An offering itself is not a sign of the company not doing well. Offerings can actually be a good thing if used appropriately. FIRE in general has been one of the worst performaing cannabis stocks. I owned it way back before the peak of the craze, got out at a nice profit and has since cratered. The clear indication that FIRE is not doing well is taking a look at is chart and historical financials which aren't great. After the initial buzz, revenue has plateaued and debt has risen significantly. The offering itself is not an indication.

Hope that makes sense.

Mat

Marked as spam

Posted by Mathieu Litalien

Answered on March 4, 2021 9:37 am

« Back to Previous Page