It was a slow day over at The Midas Letter. With nothing new from Aphria (TSX:APHA)(NYSE:APHA) about how wrong the short reports are, James West made some chatter about the Aph deal early on in his live stream and had Ben Smith on later in the show for a video version of the column he filed yesterday. There’s nothing new here. Just some mantra chanting.
They were in fill mode by market close, as co-host Ed Milewski put his glasses on to get a better look at $0.55 Pond Technologies Inc. (CNSX:POND), who are warming over the biomass-energy-from-algae idea by adding a carbon-capture twist, and selling specialized algae products designed to be
snake oil health food, but can’t seem to get any sustained volume, and have been in a steady slide since the summer.
This isn’t meant to be a criticism of everyone’s favorite Canadian stock market live stream (or of POND). They’ve got to cover something, and if it isn’t Aphria’s long promised “line-by-line rebuttal” of the Hindenburg Research report that kicked the Canadian cannabis grower in the teeth last week, any pool of pond scum will do.
This man is (no longer) my attorney! We have important business in South America
The Globe and Mail‘s Andrew Willis reported this morning that Aphria has ended their relationship with longtime counsel Stikeman Elliott LLP, and retained litigation specialists Lenczner Slaght Royce Smith Griffin LLP. The Globe‘s source wouldn’t say which side initiated the split, but it strikes us as a reasonable way for each of them to blame problems with the Latin American / Caribbean deals and the way they were structured on each other, should it produce any legal fallout.
Aphria boldly showed no intention of changing the topic, releasing news today about a letter of intent with a Paraguayan pharmaceuticals distributor that, in theory, gives APH an inside track on the 6 million person South American market that nobody was ever really looking at. It’s unclear what kind of value the market gives a supply LOI on the best days – actual supply rights certainly being the province of whatever company becomes capable of shipping – and it’s fair to say that any price or volume action from this agreement got lost in the noise.
The tree of liberty has to be periodically watered with $0.001 paper
Liberty Health Sciences (CNSX:LHS) CEO George Scorsis was doing most of the on-topic talking on the Midas Letter today. His company was implicated by association in Hindenburg’s research, having been grown in the same Florida substrate as the companies that Aph has been accused of buying at an inflated value from its directors. Scorsis alleged a couple of material errors in Hindenburg’s research, but didn’t pin them down. Mostly, he just reminded us that short sellers have a vested interest in the stock going down in a sort of indignant tone that ignores the fact that him and the rest of the long side have the opposite interest. (Our very favorite line of defense from companies targeted by short sellers comes from people who go on tout sites to explain that those short side rats can’t be trusted: They’re in it for the money!)
The highlight of the segment was Ed Milewski busting in to give an audience wondering why LHS fell off a cliff last week along with APHA the ultimate promoter-style explanation-without-information:
You guys catch all that? Markets go up, and markets go down! He’s observed markets for four decades, and in four decades, they’ve both gone up and gone down! IR desks should just route complaint calls to a recording of that segment. It’s textbook.
APHA was off $0.42 (5%) today on 19 million shares, and the natives are getting restless over at the CEO.CA forums. The support that the promised rebuttal has bought Aph appears to be growing thinner each day they make the market wait on it.