Trade To Black 30: Investing In MSOS, GameStop In A Tricky Investing Environment
In this week’s Trade To Black Podcast, Anthony Varrell, Benjamin A. Smith and Shadd Dales discussed a range of issues pertaining to GameStop’s big move, the MORE Act cannabis run, where the macro market is going and more.
Trade To Black Podcast Episode 30 CliffsNotes
Cannabis
@2:28 Stocks have performed well ahead of the MORE Act vote in the U.S. House of Representatives on Friday. The panel discussed whether the move was warranted even though the vote was merely symbolic—specifically for Canadian LPs.
@5:22 Collectively, Tier-1 MSOs experienced a poor earnings season in Q4 2021 as price compression and high inflation ravaged gross margins. Several companies lowered full year 2022 revenue/EBITDA guidance. We discuss whether it is time to buy cannabis stocks with the bad news priced-in.
@6:49 Shadd is hearing that some MSOs are experiencing a flower shortage.
Macro Economy
@8:20 Wall St. Q1 2022 performance is in the books. The NASDAQ lost 9.1% and the S&P 500 shed 4.9%. What can investors expect in terms of inflation and rate hikes over the next couple of quarters.
@10:43 Anthony is asked whether the U.S. in on the verge of recession, with the yield curve inverting this week.
@11:42 Real estate has been on a tear. Rising variable interest rates with homeowners impacts consumer spending.
@13:10 Increase in property values. Steady rational move higher or bubble? A matter of perspective.
GameStop Talk
@14:30 Some published analysis of GameStop Corp. reckons the technical ‘bull flag’ it is flashing predicts $400/share could happen. Anthony isn’t buying the company’s lofty valuations based on NFT/Web 3.0 properties to date.
@17:32 GameStop soared late this week in AH price action on news the company announced a stock split. $3 billion in market cap was added although nothing materially changed with its business operations. Ben wasn’t buying the ramp. (GME actually closed the Friday session lower 165.00-1.58 (-0.95%).
@19:24 Mechanics and psychology of the stock split. GME will now have at least 1 billion shares outstanding.
@20:08 Ben still has the perception that GameStop is predominantly a retail distributor of video games.
NFTs
@20:48 University of Michigan partners in the new N.I.L. venture with Blockpack. BlockPack, a company that creates NFT marketplaces and plans to link them with college sports fans, will make the digital tokens and facilitate their resulting auction, according to a release from the company. Anthony opines.
@22:44 The ‘Fab 5’ of Michigan, LeBron James, Shaq, Carmelo Anthony… all would have been rich coming out of High School or University has such opportunities been available early in their respective careers.
Psychedelics
@24:20 Some casualties in the industry such as Mindcure Health, which scaled back non-essential operations a couple of weeks ago. Are you surprised how fast the industry has been put on the defensive?
@26:44 Anthony is limiting his investment in the space strictly to properly capitalized companies and gives his reasons why.
@28:30 Not all small cap psychedelic juniors will fold as companies with good IP can find creative ways to obtain non-dilutive funding. Ben cites Mindset Pharma’s recent deal with Otsuka Pharmaceuticals.
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@30:03 Big Blue Final Four weekend in NCAA basketball… Coach K’s last hurrah… John Wooden.
Podcast question to viewers: Where is the psychedelic industry right now? Where do you think it is going? Leave a comment on YouTube to let us know what you think.
To view Trade To Black Podcast 29, click here.
