Aphria Inc. (APA) (FRA: 10E) today received a surprising ally as it tries to move from unhappy accusations to reporting.
At this point, there is no need to reconsider what these allegations are related to. Monday's Hindenburg Research report called Shell game with a cannabis shop on the side displays everything readers need to know about the subsequent research period. While the charges initially hit like lightning, the subsequent statement from Quality management of capital founder Gabriel Grego that Aphrie's stockpile was worthless, along with discrepancies in several research details, greatly dampen credibility.
Enter Citron Research, who surprisingly demonstrated that they support the overall value of Aphria. The bear market participant on Twitter said its support this afternoon, characterizing APHA as "convincing for all metrics," and at the same time suggesting that "stocks should see $ 10." Perhaps most relevant to investors was the promise "", which means there is additional support. It was an unexpected intervention in the ongoing serpent between Africa and Africa Hinderburg Research, whose communication this week had hit as common as a hammer.
Congratulations $ CRON. Floor was created – time to reassess all awards. $ APHA is convincing for all metrics. The cdn track is too big to ignore. Look around the noise – the stock should see $ 10. More details.
– Citron Research (@ CitronResearch) December 7, 2018
Almost immediately, the algos triggered a temporary raise of APHA around nine percent.
"Congratulations $ CRON. Floor was created – time to reassess all awards. $ APHA is convincing for all metrics. Cdn footprint is too big to ignore … shares should see $ 10. More details that will come. " pic.twitter.com/YhkrGjR8ps
– Benjamin A. Smith (@ BenjaminA_Smith) December 7, 2018
Regardless of the initial profits – which were so rare – Citron Research's involvement potentially gives Aphrii something much greater: someone who refutes Hindenburg's claim their on behalf of. Not only that, but another peer short-seller who specializes in making his goal look bad. It is a great opportunity to let two cobras strangle each other with opposing views while Aphria slowly releases from the public reflector. Starý P.T. Barnum says, "It's not such a thing as bad publicity," which can be used in a world of entertainment but not in public finances.
Also, remember that Citron had previously extended three separate bearish calls to individual cannabis names (Tilray, Namaste, Cronos), making the optics more appealing. Whether it's down, pike does not come from a well-known cheerleader team or from paid research.
With Citron Research entering into the fray, Aphria has another bullhorn to appeal to her message of innocence. Chief Executive Officer Vic Neufeld has already promised to refute the line-by-line charges, which will be reported next Wednesday. In conjunction with Andrew Levy's clothing, he should help drown Hindenburg's story of greasy insider trading, LATAM's worthless assets, and bad business.
In the light Altria GroupAn investment of $ 2.4 billion in peer Cronos Group Inc., it is good that the Canadian LP is really important. Since the high billion dollar dollars of transgional CPG money enter the area, Aphria will protect its reputation at all costs. Luckily, he gets more help in this area.
Eventually Aphria's potential hand-off is probably the scenario everyone desires. Aphria, of course, wants to focus on returning to business; regulators probably do not want to have anything to do with a scenario where fraud is not proven and collateral actors are a lot; Hindenburg has already made his money and probably turns his attention to other victims. If Aphria can tighten the message by launching insider reinforcements and improving good practices, maybe everyone can go cheerfully.
While it may not stop the actions of shareholder classes before filing, it may take years to play. Until then – assuming that court trials even have merit – Africa's "hockey" curve of income / profitability can cure many diseases. Meanwhile, I would imagine that the main business agenda is to keep regulators in the gulf and to strengthen investor confidence in the previous crisis thresholds.
Citron Research can be unexpectedly just an outfit that will help Africans break out of the crack.