A positive historical relationship exists between cannabis stock prices and the percentage of stock used in M&A deals.
Recently the percentage of stocks considered during an M&A process have ebbed & flowed with the stock market. Over the last six months, 70%+ chose to use equity, an indication of what’s believed to be an emerging trend of higher stock components.
A counterintuitive trend is emerging with increased equity issuances given the fact that cannabis stocks are now at multi-year lows.
Viridian Capital Advisors believe several factors are driving this upward trend:
Target companies are increasingly looking at the stock merger consideration as an attractive investment.
There is also a trend towards larger public deals.
The valuation gap is another critical consideration. It doesn’t matter that the stock price is lower as long as the price of target company’s stock (or private company) is lower. It is not the absolute value; it’s the gap.
Finally, we believe that smaller companies increasingly find it more advantageous to combine with larger companies to achieve economies of scale and lower capital costs.
Show Notes:
Will You Take Stock For That?
https://www.viridianca.com/chart1
Host:
Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.
https://www.linkedin.com/in/joshkincaid/
Episode 907 The #TalkingHedge…
Your Cannabis Business Podcast.
Covering cannabis products, reviews, business news, interviews, investments, events, and more.
https://www.theTalkingHedgepodcast.com
Music Info:
Song: Beat | Keep On | 2020
Artist: Milochromatic Beats
&
Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018
Artist: LuxrayBeats
Keywords:
Hemp News, Weed News, Cannabis News, Marijuana News, Cannabis Business, Marijuana Business, Cannabis Industry News, Marijuana Industry News, Weed News 420, Talking Hedge Podcast, Cannabis Podcast, Marijuana Podcast, Business Podcast, CBD podcast, THC podcast, Cannabis Pitch Deck, Marijuana Pitch Deck, Marijuana Investment Deck, Cannabis Investment Deck, Cannabis Compliance, Cannabis Data, Cannabis Banking, Cannabis Investment, Pot Stocks, Cannabis Stocks, Weed Stocks, Marijuana Stocks, Cannabis Data, Marijuana Data, Cannabis Analytics, Marijuana Analytics, Cannabis Sales Data, Marijuana Sales Data
Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers. This is only entertainment.
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