IKN

saucy doubts and fears

Cannabis Wheaton (CBW.v): An interesting seven days in store (from IKN425)

From IKN 425, out last night. CBW is already down 10% today and at the lowest price since late March, when this bullshit scam pump began.


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Cannabis Wheaton
(CBW.v): An interesting seven days in store

I’ve written a lot about Cannabis
Wheaton (CBW.v) on the blog, due at first to its extremely shady structural
background and then following up as new and dirty details came to light (from
very well placed sources, I might add). However, this is the first time CBW has
had a mention here, the more serious side of what I get up to, because CBW has
a couple of dates in its diary which may well affect the stock price
considerably and there’s a clear trade opportunity showing now. Three things to
consider:

1) On March 14th, CBW (at that
point still called Knightswood Financial Corp) closed a financing by selling
18,272,773 units at 5.5c each, raising gross proceeds of $1,005,003. One unit
was one share plus a full warrant priced at 7c. That placement comes out of
escrow tomorrow, July 10th.

2) Then on March 21st CBW closed a
second tranche of the same placement run, sell 7,237,883 units at the same
terms. This second tranche comes out of escrow on July 17th.

3) But then the twist came, as on
March 24th these two-faced rip-off merchants ran a three-for-one forward split
of company shares, which means every share and warrant they sold magically
becomes three. Therefore in the next seven days, starting tomorrow Monday,
76,531,968 shares and 76,531,968 warrants (7c strike, now 2.33c) of CBW.v
become free trading in a stock that’s been artificially held up and even after
selling pressure last week closed at 87c. In other words, it’s payola time for
the people at the centre of this scam.

Assuming the debentures and special
warrants sold this month at $1.00 apiece are converted (they won’t be) CBW now
has around 330m shares out. Just under half of those shares were under lock and
key due to the March financings, they’re about to hit the market. In this blog
post dated June 13th (19) I did a bit of basic balance sheet work
and ballparked a share price of 50c for CBW if they managed to close the
placement and get that $50m on board, which they have done. I think that’s still
a pretty reasonable prognostic so if you’re looking for a short candidate in this
market, look no further.

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