Globe says analysts puzzling over Canntrust's value
Canntrust Holdings Inc (C:TRST)
Shares Issued 141,481,527
Last Close 9/18/2019 $1.72
Thursday September 19 2019 - In the News
The Globe and Mail reports in its Thursday edition that analysts are struggling to put a value on Canntrust Holdings given its uncertain future. The Globe's Mark Rendell writes that Canntrust's market capitalization is now $240.5-million, closely matching cash on its books. The valuation suggests investors are discounting the worth of the company's greenhouse and processing facility, which could be forced to close for an indefinite period of time if Canntrust fails to appeal the licence suspensions. The company valued its property and equipment at $70.5-million in March. Eight Capital analyst Graeme Kreindler says: "As of June 30, 2019, [CannTrust] had $250-million in cash, suggesting a value of $1.77 per share. However, the inability to sell product, along with probable outlays including legal/professional fees, lawsuits, maintenance capex and employee severance, present burdens on the balance sheet that will likely erode its value over time." Just keeping the lights on will be expensive, says Royal Bank of Canada analyst Douglas Miehm. He adds that Canntrust "could face meaningful cash burn over the coming months." CannTrust was going through about $19-million in cash a quarter to covers its operations.
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