Friday File: A Richer Crown, A Missed Fast Stop, and a Subversive Pot REIT
by Travis Johnson, Stock Gumshoe | October 23, 2020 3:08 pm
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Source URL: https://www.stockgumshoe.com/2020/10/friday-file-a-richer-crown-a-missed-fast-stop-and-a-subversive-pot-reit/
What happens to CCI and other tower REIT’s if Elon Musk is successful with his constellations of satellites providing direct access to the internet??
All indications I see are that satellite-to-mobile won’t be competitive with terrestrial wireless anytime soon, presumably not for at least 5-10 years. Initial use of satellite will be to compete with or offer the first version of broadband in rural areas, I expect… maybe it goes beyond that in the coming years, and maybe it will be faster than I expect, technology changes faster than I can change my mind sometimes… but it’s hard to do even LEO transmission without latency. I’m not worried about it as a CCI shareholder, but it does come up as a discussion idea often — mostly because satellites and space are cool and tend to attract investor attention.
I wonder if services like FSTLY and NET can be used to reduce the latency of satellite internet? It would make more commercial sense and help scale satellite internet faster too.
I’m wondering why CCI has seemed to lag AMT in revenue growth and share price appreciation in anticipation of 5G rollout, given from what I understand, CCI is more well positioned to benefit from 5G infrastructure buildout with the dense urban sites necessary for 5G. Would it be more prudent to put half positions in both AMT and CCI vs. a full position in CCI?
Thanks Travis and happy Friday. I too added a little CCI yesterday and sold FSLY for a tiny loss. I was too greedy this time and should have taken the profit 2 weeks ago. In this “irrational exuberant” market, truly hard to know when to get out. I also ended up selling NET today to take the profit – afraid it will end up like FSLY. I might be wrong again.
Hope it works out for you. Remember to mix in at least a little hope with the fear 🙂
Thanks Travis. All the best to you as well.
Im holding my NET shares cause they are growing the fastest and do the same with AKAM as they are the only profitable CDN out there are expanding quietly into internet security
Your not wrong about the rule breakers stock pick of the week.
Appreciate the update and your consistent approach and guidance. My Fastly basis has an average cost of $21.30 so I am sticking with it although I did celebrate a while ago with a sale which covered my initial investment so it’s all gravy now.
My CCI basis is at $121.30 which has increased slightly over the last few months due to a bunch of “micro buys“. Most of the purchases were 2-3 years ago back in the $ 80s
I look at my portfolio as being necessary for income in about 7-10 years so I’m willing to take some chances now on some of these big growth companies. I am also digging into the details in my portfolio to identify just how much risk I have attached to these particular kinds of companies as many of the names you identified a few weeks ago I also own.
I also have a private equity stake in a cannabis company in Massachusetts that had been making money consistently for a year; after a 2.5 year start up time.. They have gone from 1 to 3 retail dispensaries as well as a large grow operation. It was a little touch and go when Massachusetts shut vaping and then retail sales down for a few months but with all of the investors help by suspending payouts they were able to keep staff on board, keep the grow operations at full speed to build inventory and survive at the greatly reduced medical only sales run. We are back at a little over $2.5 million/month revenue and the future is looking good. That and I I PR, purchased back when it first went public, have been my only investments in the cannabis area.
It’s been a great ride so far this year but reading your updates is a great reminder to take nothing for granted. Since that accident left me a quadriplegic and took me out of the workplace after 30 years, I’ve had much more time to spend on my investments (previously just on auto pilot via 401(k)s and company stock bonuses). Thank you for being a great source of ideas, education and perspective.
PS: there is a interesting little Australian online gambling business called PointsBet who recently signed a deal with NBC. Their stock jumped over 100% on one day and has managed to hold onto most of that higher valuation. It’s been interesting to watch their ride from the early days as a public company.
AAAU (Perth Mint Physical Gold ETF) is worth a look. Low fees and backed by the Western Australian govt.
For gold exposure that is.
I don’t believe I’ve ever seen a more convoluted investment than the Subversive SPAC. I’ve googled about the rights and don’t find much info. So, is purchasing SBRVF purchasing those rights? Conversion takes place this week and there is small volume, does one have to register on NEO to trade? I had looked into Inception several years ago but at the time there were several organizations attempting the same and most withered on the vine. I;m almost tempted to refer back to Buffet in that is someone can’t explain it to you in a couple sentences then its not right for you. I have dabbled in weed stocks and been promptly punished. Pharmaceilo sounded like a sound business plan with good management but… then tried a weed ETF and that failed to bloom.
Buffett’s maxim is quite wise — Google won’t get you anywhere with this one, you’ll need to read the actual Sedar filings for any detail, and make your own judgement. I don’t think the Rights trade OTC in the US, just the units themselves, but most brokers can access the NEO for trading. I used Interactive Brokers, haven’t checked with any others.
I am right there with you, SPAC’s seem too confusing to bother with if you are only putting in minimal amounts.
I bought warrants on ROIC that Travis mentioned several years ago and didn’t really know what I was doing. A while later I got a message from my broker saying i couldn’t trade them anymore, oops. Luckily I had money avaliable to convert the warrants to stock or they would have expired worthless (i think?) . Luckily the company did quite well for several years, but it was just luck.
Thanks for that write up on Subversive. It helped me clarify some things in my brain after going over the prospectus. After DD I got in on the Rights and some Commons. I’m hoping the price doesn’t drop but we’ll see. I found this interview with Richard Acosta which I thought was pretty good for anyone interested:
https://www.youtube.com/watch?v=0LGZrZIQHA4
I think it’s from up here in Canada. I also found it interesting that he is on the boards for both Inception and Subversive. Is that not a strong indicator of a green light for a deal? Would love to know what you think.
I’m long on this one. The market is ripe in the States and continue to grow, I believe at least. Deeply experienced management, looks pretty impressive. I’d hate to see the price drop like in the latest wave of SPACs, for which I’ve chosen incorrectly. But we’ll see.
Thanks again, loved the article!
Likewise Travis, the in-depth look into Subversive was great especially with the redemption request deadline coming up. Wish I had found out about the caveat surrounding exercising the Rights though (SVX.RT.U). I intended to convert my rights to shares if and when the opportunity presented itself, but that appears improbable as I’m neither Canadian nor an accredited US investor. (IBKR should not have allowed the trade to go through in that case? – odd). Nevertheless, does this mean my only option with existing rights would be to trade them directly? Thanks.
That would be my guess… though if they’re liquid enough, it shouldn’t matter much — they ought to trade at a fair price eventually. Hopefully that means the rights rise more than the shares fall, but we’ll see.
Subversive has moved the redemption of restricted voting units from Nov 2 to Nov 9. What does that mean? Is this positive or negative? As a noob I don’t understand the significance. Thanks,
Haven’t seen that, the notices I see all say November 2. They did push it back by a few days to that Nov. 2 date, so I would assume that there’s some delay in the processing or maybe the regulators pushed back about the time allowed if they’re being forced to add a week.
If that’s all it is, I don’t know of any reason why it would be a a big deal. That’s the deadline by which SPAC shareholders must request their redemption if they don’t want to get shares in the newly merged REIT and go through with the deal, and the shares have often been trading right around redemption value over the past week or so ($10.04, last I checked), so small shareholders could as easily just sell if they want out. Maybe they’re trying to convince some large shareholders not to redeem, and need the time for that begging, or maybe it’s just a paperwork or regulatory issue, but I haven’t seen any SEDAR filing or other announcement of the new deadline (I’m not a shareholder, so I don’t get their official notifications). I have not seen an official shareholder vote announcement either, but the re-election of board members with 100% of the vote indicates to me that shareholders are not upset, so my assumption remains that the deal will go through in the next couple weeks. It’s a strange one, for sure, so perhaps I’m missing something.
Ah, now I see the Nov. 9 extension has gone live on Sedar. No particular explanation for the extension given, just reiterating their optimism and the contingent rights they’re giving to folks who stick it out, and the trading today was all done (slightly) above the redemption price, so who knows. I don’t remember what the terms are for completing the qualifying transaction, but it’s also fairly complex because they’re not just buying a company, they’re buying a bunch of different assets… so I suppose it’s possible they could have issues with some of those buildings and loans and not close the whole deal at once if redemptions cut down on the cash available.
They say they expect the qualifying transaction to close within two weeks now, “on or around November 13,” so we’ll find out soon enough — they also slightly “uplisted” their OTC shares in the US to the OTCQX, which doesn’t really mean much but is a small positive. Volume extremely low on both the NEO (~50,000 shares) and OTC in the US (~17,000 shares).
Haven’t changed my opinion — I still assume the deal will go through, still think the Rights are foolishly priced if it does… maybe the market will tell me I was wrong and the deal will collapse, or the stock will collapse post-deal, but I’ll hold on to see what happens.
Thanks for the reply Travis. Should be an exciting couple weeks. The Rights aren’t showing any Volume chart today and no last price. Strange? I’m not sure what that means. Big bid – ask price gap.
I couldn’t find a Strike Price for the Rights in the prospectus so I’m guessing that this is different than other SPACs because it’s a REIT? Then is it a straight 1/8th conversion to commons? Good deal. Under 3 bucks for me if that’s correct.
I agree (or being optimistic) that the deal will close. Management looks so solid. And I like their style with all the other segments of the business.
Patience until “on or around November 13″ it is then! Thanks again.
They are Rights, not Warrants or Options, so my reading is that 8 Rights = 1 share when the dust settles, no additional cash consideration required. Doesn’t make sense, given the pricing, which is my only caution — the pricing is so far off that a little voice keeps telling me I’m missing something, but if so I haven’t yet found what it is I’m missing… other than the risk that the deal fails, or is immediately seen as terrible post-deal.
Subversive Capital REIT – Looks like they killed the deal!!!!! Sold my Rights. Sooooo disappointing. Please tell me I’m wrong and this will happen. Trying to get an answer from them. Damn…
https://www.newswire.ca/news-releases/subversive-real-estate-acquisition-reit-lp-withdraws-redemption-event-and-provides-update-on-qualifying-transaction-812264996.html
Does look like a screwup, for sure, though not much detail from them yet. Most of my rights hit their stop limit and were sold this morning, though I still hold some. Will be curious to see what they say, odd that the deal would fail unless there’s a serious issue in there somewhere.