How does a company lose $1 billion in three months? Ask Canopy Growth.
I was thinking just yesterday morning, as the world markets were tumbling, that I view Canopy Growth as a great long term stock that has huge potential. So I did not want to sell out of my position in CGC just due to the short term market roller coaster, in favor of holding out for long term gains.
What a difference a day makes…
After the markets closed yesterday, Canopy Growth Corp. reported their Q1 earnings. Unfortunately for me, the stock absolutely plummeted as a result, dropping 11.7% after the markets were closed. Even after the after-hours session (which I don’t really understand how that is possible, other than to guess that institutional investors get to do things that us individual investors can’t).
EDIT: Okay, I looked it up. If a stock price is continuing to move after the after-hours market closes (which all look like they close by 9pm ET), then it is likely due to orders continuing to be submitted/queued up for when the pre-market opens the following day. The stock’s price will track the midpoint between the bid and ask prices throughout the night, and trades will resume at market open (or pre-market open) near the new bid/ask spread (gapping up or down).
Key numbers from the Earnings Report (in CAD):
- Net Revenue down 4% from prior quarter, $90.5M (versus $111M estimated)
- Adjusted Net Income was -$1.28B (versus -$1727M estimated)
- Gross margins fell to 15% (versus 43% in the same quarter last year)
This was the first earnings report without Bruce Linton, who was fired by Constellation Brands about a month ago. With Constellation taking a 38% stake in Canopy back in October 2018, I can’t help but wonder if this is the same company I was so hopeful for when first purchasing TWMJF over-the-counter at $8.92 per share back in February 2017.
Perhaps one of my lessons to learn is not fall in love with a company/stock. Time changes everything, and I have some more thinking to do to determine if this is still a long term hold.
Today’s Positions
- Canopy Growth Corp. (CGC): 40 shares @ $27.34 (-14.38%)
- YETI Holdings, Inc. (YETI): 10 shares @ $27.00 (-3.74%)
- Baytex Energy Corporation (BTE): 200 shares @ $1.27 (-0.78%)
- Microsoft Corp. (MSFT): 1 share @ $133.68 (-0.22%)
An opening two, brutal days in a row have got me questioning if I’m cut out to play in this market. After two days, my Robinhood account is down from $2,062 to $1,829.
Hoping for some better news tomorrow.
FNMNY 