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Lokying
2021-04-20
Nice ??
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Lokying
2021-04-20
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Actually, Sundial Growers Cutting Debt Isn’t a Good Sign
Lokying
2021-04-20
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","listText":"Nice ?? ","text":"Nice ??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/371312724","repostId":"2128894282","repostType":4,"repost":{"id":"2128894282","pubTimestamp":1618909004,"share":"https://ttm.financial/m/news/2128894282?lang=&edition=fundamental","pubTime":"2021-04-20 16:56","market":"us","language":"en","title":"How Apple Can Afford to Pay Twice as Much as Spotify for Music Streaming","url":"https://stock-news.laohu8.com/highlight/detail?id=2128894282","media":"Motley Fool","summary":"There are some big differences between Apple Music and Spotify that investors need to consider.","content":"<p><b>Apple</b> (NASDAQ:AAPL) recently gave itself a pat on the back when it wrote a letter to recording artists noting it pays a penny per stream on its Apple Music service. That's about twice the rate of <b>Spotify</b> (NYSE:SPOT), the world's largest streaming service.</p>\n<p>And while it's leading in its payout rate on a per stream basis, it only pays out 52% of revenue to record labels. By comparison, Spotify pays out about two-thirds of its revenue to labels.</p>\n<p>There are a number of factors that enable Apple to pay more per stream to artists while keeping more of its revenue for itself. Here's what investors should consider.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/046b63ab6db3c69727b0d65979f74f23\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<h2><b>The big difference between Spotify and Apple Music</b></h2>\n<p>Spotify offers a free ad-supported tier for listeners, but Apple Music is subscription only. That difference in strategy has a big effect on the rates each service pays to artists and the percentage of revenue those royalties account for.</p>\n<p>Spotify has long held up its free ad-supported tier as an important driver of paid subscriptions in the long run. In fact, Spotify contends that offering a free tier prevents listeners from seeking \"non-revenue-generating alternatives,\" which you might just call \"piracy.\"</p>\n<p>But there's a drawback to offering a free tier -- less revenue per listener. As of the end of 2020, Spotify had 199 million free listeners and 155 million paid subscribers. But ad-supported revenue in the seasonally strong fourth quarter totaled just 281 million euros versus 1.89 billion euros for the paid subscribers.</p>\n<p>Importantly, when Spotify pays a royalty for a listener on its ad-supported tier, it pays it out of the ad-supported revenue. And with 199 million listeners, even if they're less engaged on average than paid listeners, that's going to drag down its average payout per stream.</p>\n<p>On the other hand, Spotify's contracts with record labels typically include guaranteed minimums, which means it may have to pay additional royalties if it doesn't generate enough engagement with the service. That could push the percentage of revenue it pays higher on average than its paid tier, where revenue is much more predictable.</p>\n<h2><b>Apple doesn't need a free tier</b></h2>\n<p>Apple's biggest advantage over Spotify is that it owns the distribution platform. While it's possible to use Apple Music on devices not made by Apple, it's much more common among iPhone owners. And every iPhone comes with Apple Music pre-installed. It's the default music app. Even if you want to listen to music you've already downloaded, you'll use the Apple Music app by default on an iPhone.</p>\n<p>That presents a big opportunity for Apple to onboard new subscribers. No need to tempt them with a free ad-supported service. No free tier means Apple's average revenue per user is higher than Spotify's.</p>\n<p>What's more, Apple's paid users may not be as engaged as Spotify's paid users. If a Spotify user doesn't use the service as much, they may not mind the occasional ad while listening. As a result, Apple generates more revenue per stream, and it pays out more per stream.</p>\n<h2><b>What it all means for investors</b></h2>\n<p>For Apple investors, the important number to pay attention to isn't that it pays more per stream than Spotify. It's that it manages to pay out only half of revenue as royalties. A lower cost of sales, combined with Apple's position as a platform owner, allows it to bundle Apple Music without using it as a loss leader.</p>\n<p>Indeed, Apple Music is at the core of Apple's Apple One bundle, which includes all the various subscription services the company introduced over the last half decade or so. That allows Apple to profitably bolster its other services while increasing customer engagement with its services and retaining them as iPhone and Mac users year after year.</p>\n<p>For Spotify investors, Apple's relatively low royalty rate is also important. It indicates there's a lot of room for improvement in the company's premium gross margin, which came in at 28.9% in the fourth quarter. There's a big gap between that and the 48% Apple keeps after paying royalties, which accounts for the bulk of cost of sales. Spotify keeps its contracts with record labels short, so it frequently has an opportunity to renegotiate and improve its margins.</p>\n<p>Meanwhile, Spotify's investing heavily in podcasts, both as a means to attract new users and to improve its margin for its ad-supported business. If Spotify can bring its ad-supported tier to break-even and raise the margin on its premium tier, it could become tremendously profitable given the scale the tech company's already achieved.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Apple Can Afford to Pay Twice as Much as Spotify for Music Streaming</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Apple Can Afford to Pay Twice as Much as Spotify for Music Streaming\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 16:56 GMT+8 <a href=https://www.fool.com/investing/2021/04/19/how-apple-can-afford-to-pay-twice-as-much-as-spoti/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Apple (NASDAQ:AAPL) recently gave itself a pat on the back when it wrote a letter to recording artists noting it pays a penny per stream on its Apple Music service. That's about twice the rate of ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/04/19/how-apple-can-afford-to-pay-twice-as-much-as-spoti/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://www.fool.com/investing/2021/04/19/how-apple-can-afford-to-pay-twice-as-much-as-spoti/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2128894282","content_text":"Apple (NASDAQ:AAPL) recently gave itself a pat on the back when it wrote a letter to recording artists noting it pays a penny per stream on its Apple Music service. That's about twice the rate of Spotify (NYSE:SPOT), the world's largest streaming service.\nAnd while it's leading in its payout rate on a per stream basis, it only pays out 52% of revenue to record labels. By comparison, Spotify pays out about two-thirds of its revenue to labels.\nThere are a number of factors that enable Apple to pay more per stream to artists while keeping more of its revenue for itself. Here's what investors should consider.\nImage source: Getty Images.\nThe big difference between Spotify and Apple Music\nSpotify offers a free ad-supported tier for listeners, but Apple Music is subscription only. That difference in strategy has a big effect on the rates each service pays to artists and the percentage of revenue those royalties account for.\nSpotify has long held up its free ad-supported tier as an important driver of paid subscriptions in the long run. In fact, Spotify contends that offering a free tier prevents listeners from seeking \"non-revenue-generating alternatives,\" which you might just call \"piracy.\"\nBut there's a drawback to offering a free tier -- less revenue per listener. As of the end of 2020, Spotify had 199 million free listeners and 155 million paid subscribers. But ad-supported revenue in the seasonally strong fourth quarter totaled just 281 million euros versus 1.89 billion euros for the paid subscribers.\nImportantly, when Spotify pays a royalty for a listener on its ad-supported tier, it pays it out of the ad-supported revenue. And with 199 million listeners, even if they're less engaged on average than paid listeners, that's going to drag down its average payout per stream.\nOn the other hand, Spotify's contracts with record labels typically include guaranteed minimums, which means it may have to pay additional royalties if it doesn't generate enough engagement with the service. That could push the percentage of revenue it pays higher on average than its paid tier, where revenue is much more predictable.\nApple doesn't need a free tier\nApple's biggest advantage over Spotify is that it owns the distribution platform. While it's possible to use Apple Music on devices not made by Apple, it's much more common among iPhone owners. And every iPhone comes with Apple Music pre-installed. It's the default music app. Even if you want to listen to music you've already downloaded, you'll use the Apple Music app by default on an iPhone.\nThat presents a big opportunity for Apple to onboard new subscribers. No need to tempt them with a free ad-supported service. No free tier means Apple's average revenue per user is higher than Spotify's.\nWhat's more, Apple's paid users may not be as engaged as Spotify's paid users. If a Spotify user doesn't use the service as much, they may not mind the occasional ad while listening. As a result, Apple generates more revenue per stream, and it pays out more per stream.\nWhat it all means for investors\nFor Apple investors, the important number to pay attention to isn't that it pays more per stream than Spotify. It's that it manages to pay out only half of revenue as royalties. A lower cost of sales, combined with Apple's position as a platform owner, allows it to bundle Apple Music without using it as a loss leader.\nIndeed, Apple Music is at the core of Apple's Apple One bundle, which includes all the various subscription services the company introduced over the last half decade or so. That allows Apple to profitably bolster its other services while increasing customer engagement with its services and retaining them as iPhone and Mac users year after year.\nFor Spotify investors, Apple's relatively low royalty rate is also important. It indicates there's a lot of room for improvement in the company's premium gross margin, which came in at 28.9% in the fourth quarter. There's a big gap between that and the 48% Apple keeps after paying royalties, which accounts for the bulk of cost of sales. Spotify keeps its contracts with record labels short, so it frequently has an opportunity to renegotiate and improve its margins.\nMeanwhile, Spotify's investing heavily in podcasts, both as a means to attract new users and to improve its margin for its ad-supported business. If Spotify can bring its ad-supported tier to break-even and raise the margin on its premium tier, it could become tremendously profitable given the scale the tech company's already achieved.","news_type":1},"isVote":1,"tweetType":1,"viewCount":389,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":371312819,"gmtCreate":1618910587631,"gmtModify":1704716724435,"author":{"id":"3581912671438872","authorId":"3581912671438872","name":"Lokying","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581912671438872","authorIdStr":"3581912671438872"},"themes":[],"htmlText":"??","listText":"??","text":"??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371312819","repostId":"1145690481","repostType":4,"isVote":1,"tweetType":1,"viewCount":255,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":371312974,"gmtCreate":1618910557598,"gmtModify":1704716723784,"author":{"id":"3581912671438872","authorId":"3581912671438872","name":"Lokying","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581912671438872","authorIdStr":"3581912671438872"},"themes":[],"htmlText":"??","listText":"??","text":"??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371312974","repostId":"1145690481","repostType":4,"isVote":1,"tweetType":1,"viewCount":290,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":371312724,"gmtCreate":1618910625868,"gmtModify":1704716725088,"author":{"id":"3581912671438872","authorId":"3581912671438872","name":"Lokying","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581912671438872","idStr":"3581912671438872"},"themes":[],"htmlText":"Nice ?? ","listText":"Nice ?? ","text":"Nice ??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/371312724","repostId":"2128894282","repostType":4,"isVote":1,"tweetType":1,"viewCount":389,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":371312974,"gmtCreate":1618910557598,"gmtModify":1704716723784,"author":{"id":"3581912671438872","authorId":"3581912671438872","name":"Lokying","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581912671438872","idStr":"3581912671438872"},"themes":[],"htmlText":"??","listText":"??","text":"??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371312974","repostId":"1145690481","repostType":4,"repost":{"id":"1145690481","pubTimestamp":1618909501,"share":"https://ttm.financial/m/news/1145690481?lang=&edition=fundamental","pubTime":"2021-04-20 17:05","market":"us","language":"en","title":"Actually, Sundial Growers Cutting Debt Isn’t a Good Sign","url":"https://stock-news.laohu8.com/highlight/detail?id=1145690481","media":"InvestorPlace","summary":"The positive environment for leverage raises questions about decisions around SNDL stock\nCannabis is","content":"<p>The positive environment for leverage raises questions about decisions around SNDL stock</p>\n<p>Cannabis is a hot market, essentially representing the mathematical impossibility of turning zero into a non-zero number. What I mean is that a black market has turned into a legitimate, taxable one. Further, with greater support for legalization, the narrative appears brilliant for <b>Sundial Growers</b> (NASDAQ:<b><u>SNDL</u></b>). So, why isn’t SNDL stock moving higher?</p>\n<p>In fact, after a brilliant start to the year, Sundial Growers has gradually lost support from its ardent fans. Don’t get me wrong — SNDL stock is technically one of the strongest year-to-date performers, up 54%. But since its closing peak of $2.95 on Feb. 10, shares are down a staggering 71%.</p>\n<p>Ironically, here on April 20 —or “420” in pot parlance— SNDL is now a literal penny stock at 94 cents.</p>\n<p>Naturally, this has many folks worried about holding the bag. You see, the law of small numbers works stunningly when you’re on the long side of a bullish rally. But the opposite is also true — individual sessions could see you lose double-digit percentage points.</p>\n<p><b>Doubling Down on Optimism</b></p>\n<p>Our own David Moadel doesn’t appear to be perturbed by the volatility, insisting that he’s going to double down on his optimism. As he put it, “If the stock was good at nearly $4, it should be terrific around $1. Could I be wrong about that? Of course, but the risk-to-reward profile seems even better now.”</p>\n<p>At the risk of ruffling feathers, I have a different opinion, but let’s examine his reasoning first. One of his main arguments is that SNDL stock could benefit from the underlying company slashing its debt and reducing expenditures. Moadel noted that in 2020, “the company eliminated $227 million in its aggregate principal amount of debt.”</p>\n<p>Further, by reducing the size of its workforce, Sundial Growers is theoretically a leaner and more efficient operator. Additionally, management firmed up its capital position for the long term.</p>\n<p><b>Read Between the Lines</b></p>\n<p>On paper, there doesn’t seem to be anything wrong with cutting debt and expenses. I mean, that’s what every personal financial guru tells us. So, why should it be any different for SNDL stock?</p>\n<p>Primarily, the difference is that regular people are people, they’re not businesses. Further, cutting debt and expenses are deflationary actions. Deflation is the opposite of growth. SNDL stock is a growth play. Look, the company even has the word growers in its name!</p>\n<p>The point is, investors should look beyond the headline print and read between the lines. First, cost cutting sounds good in principle until you filter out the reason why such a move is necessary. According to Sundial Growers CEO Zach George, the company “curtailed production and reduced the size of our workforce in response to market demand.”</p>\n<p>In response to market demand? That tells me that management has little confidence that the cannabis sector as it stands will support the original growth-oriented objective of Sundial. Instead, the firm must scale down, which is the opposite narrative fueling growth stocks.</p>\n<p>Second, the idea of cutting debt to zero as of the balance sheet of the quarter ended Dec. 31, 2020 is a curious one. Again, I understand if you were talking about individuals cutting out debt. But for a growth firm seeking to take market share from its competitors? The scaling back on debt is another signal of little to no confidence regarding the viability of the cannabis industry.</p>\n<p>Plus, look at the benchmark interest rate. Sure, it’s ticked up higher due in part to growing optimism regarding a broader economic recovery. But the rates are still dirt cheap relative to prior years. Thus, for a business – especially a growth-oriented business – it’s the perfect time to leverage the cheap money environment.</p>\n<p>Sundial not taking this clear monetary opportunity is an uncomfortable sign for SNDL stock.</p>\n<p><b>SNDL is a Falling Knife</b></p>\n<p>Back early last month, I warned that SNDL stock is technically overdue for a correction. I’m not going to toot my own horn and say that I was right. Instead, this was merely an exercise in seeing the obvious — so long as you were objective about what the market was telling us.</p>\n<p>If you look at the chart that I posted in that article, you can clearly tell that at $1.30, SNDL stock was testing the support line of a rising bullish channel. Unless some catalyst arrived — we weren’t going to get it from the financials — Sundial shares risked falling out of the channel.</p>\n<p>That’s exactly what happened. SNDL badly needed a social media boost and it didn’t get one. With the bears now in control, Sundial has become a falling knife. You might be able to secure a discount as the masses rush back into SNDL. But chances are, you’re going to end up hurting your portfolio.</p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Actually, Sundial Growers Cutting Debt Isn’t a Good Sign</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nActually, Sundial Growers Cutting Debt Isn’t a Good Sign\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 17:05 GMT+8 <a href=https://investorplace.com/2021/04/sndl-stock-cutting-debt-is-not-good-sign/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The positive environment for leverage raises questions about decisions around SNDL stock\nCannabis is a hot market, essentially representing the mathematical impossibility of turning zero into a non-...</p>\n\n<a href=\"https://investorplace.com/2021/04/sndl-stock-cutting-debt-is-not-good-sign/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNDL":"SNDL Inc."},"source_url":"https://investorplace.com/2021/04/sndl-stock-cutting-debt-is-not-good-sign/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1145690481","content_text":"The positive environment for leverage raises questions about decisions around SNDL stock\nCannabis is a hot market, essentially representing the mathematical impossibility of turning zero into a non-zero number. What I mean is that a black market has turned into a legitimate, taxable one. Further, with greater support for legalization, the narrative appears brilliant for Sundial Growers (NASDAQ:SNDL). So, why isn’t SNDL stock moving higher?\nIn fact, after a brilliant start to the year, Sundial Growers has gradually lost support from its ardent fans. Don’t get me wrong — SNDL stock is technically one of the strongest year-to-date performers, up 54%. But since its closing peak of $2.95 on Feb. 10, shares are down a staggering 71%.\nIronically, here on April 20 —or “420” in pot parlance— SNDL is now a literal penny stock at 94 cents.\nNaturally, this has many folks worried about holding the bag. You see, the law of small numbers works stunningly when you’re on the long side of a bullish rally. But the opposite is also true — individual sessions could see you lose double-digit percentage points.\nDoubling Down on Optimism\nOur own David Moadel doesn’t appear to be perturbed by the volatility, insisting that he’s going to double down on his optimism. As he put it, “If the stock was good at nearly $4, it should be terrific around $1. Could I be wrong about that? Of course, but the risk-to-reward profile seems even better now.”\nAt the risk of ruffling feathers, I have a different opinion, but let’s examine his reasoning first. One of his main arguments is that SNDL stock could benefit from the underlying company slashing its debt and reducing expenditures. Moadel noted that in 2020, “the company eliminated $227 million in its aggregate principal amount of debt.”\nFurther, by reducing the size of its workforce, Sundial Growers is theoretically a leaner and more efficient operator. Additionally, management firmed up its capital position for the long term.\nRead Between the Lines\nOn paper, there doesn’t seem to be anything wrong with cutting debt and expenses. I mean, that’s what every personal financial guru tells us. So, why should it be any different for SNDL stock?\nPrimarily, the difference is that regular people are people, they’re not businesses. Further, cutting debt and expenses are deflationary actions. Deflation is the opposite of growth. SNDL stock is a growth play. Look, the company even has the word growers in its name!\nThe point is, investors should look beyond the headline print and read between the lines. First, cost cutting sounds good in principle until you filter out the reason why such a move is necessary. According to Sundial Growers CEO Zach George, the company “curtailed production and reduced the size of our workforce in response to market demand.”\nIn response to market demand? That tells me that management has little confidence that the cannabis sector as it stands will support the original growth-oriented objective of Sundial. Instead, the firm must scale down, which is the opposite narrative fueling growth stocks.\nSecond, the idea of cutting debt to zero as of the balance sheet of the quarter ended Dec. 31, 2020 is a curious one. Again, I understand if you were talking about individuals cutting out debt. But for a growth firm seeking to take market share from its competitors? The scaling back on debt is another signal of little to no confidence regarding the viability of the cannabis industry.\nPlus, look at the benchmark interest rate. Sure, it’s ticked up higher due in part to growing optimism regarding a broader economic recovery. But the rates are still dirt cheap relative to prior years. Thus, for a business – especially a growth-oriented business – it’s the perfect time to leverage the cheap money environment.\nSundial not taking this clear monetary opportunity is an uncomfortable sign for SNDL stock.\nSNDL is a Falling Knife\nBack early last month, I warned that SNDL stock is technically overdue for a correction. I’m not going to toot my own horn and say that I was right. Instead, this was merely an exercise in seeing the obvious — so long as you were objective about what the market was telling us.\nIf you look at the chart that I posted in that article, you can clearly tell that at $1.30, SNDL stock was testing the support line of a rising bullish channel. Unless some catalyst arrived — we weren’t going to get it from the financials — Sundial shares risked falling out of the channel.\nThat’s exactly what happened. SNDL badly needed a social media boost and it didn’t get one. With the bears now in control, Sundial has become a falling knife. You might be able to secure a discount as the masses rush back into SNDL. But chances are, you’re going to end up hurting your portfolio.","news_type":1},"isVote":1,"tweetType":1,"viewCount":290,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":371312819,"gmtCreate":1618910587631,"gmtModify":1704716724435,"author":{"id":"3581912671438872","authorId":"3581912671438872","name":"Lokying","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3581912671438872","idStr":"3581912671438872"},"themes":[],"htmlText":"??","listText":"??","text":"??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371312819","repostId":"1145690481","repostType":4,"isVote":1,"tweetType":1,"viewCount":255,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
