Once a darling of the CBD growth speculation fever, shares of Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) have been in retreat with clear and important support levels now finally up for key tests. In particular, we would have a close on the $13-13.25 area as a possible opportunity. To further flesh out the story, the company just announced that the underwriters of its previously announced underwritten public offering of 7,000,000 common shares of the company sold by certain current shareholders at a price of C$20.00 per share have exercised in full their option to purchase an additional 1,050,000 common shares from the selling shareholders at the offering price.
According to the release, “The gross proceeds to the Selling Shareholders under the exercise of this over-allotment will be C$21,000,000, and together with the gross proceeds from the initial closing on May 15, 2019 of C$140,000,000, the aggregate gross proceeds of the offering (the “Offering”) will be $161,000,000.”
Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) bills itself as a company that develops and distributes hemp-based cannabidiol (CBD) wellness products. Its products include CBD hemp oils, capsules, topicals, and pet products that feature CBD hemp oil extracts.
Charlotte’s Web Holdings, Inc. sells its products online as well as through distributors, and brick and mortar retailers.
The company was formerly known as Stanley Brothers Holdings Inc. and changed its name to Charlotte’s Web Holdings, Inc. in July 2018. The company was incorporated in 2018 and is headquartered in Boulder, Colorado.
According to company materials, “Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-based cannabidiol (“CBD”) wellness products. Founded by the Stanley Brothers, the Company’s premium quality products start with proprietary hemp genetics that are responsibly manufactured into whole plant hemp extracts naturally containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other beneficial hemp compounds. Industrial hemp products are non-intoxicating. Charlotte’s Web current product categories include tinctures (liquid products), capsules, topical, as well as pet products. Charlotte’s Web hemp-based whole plant extracts are sold through select distributors, brick and mortar retailers, and online through the Company’s website.”
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As noted above, CWBHF just announced that the underwriters of its previously announced underwritten public offering of 7,000,000 common shares of the company sold by certain current shareholders at a price of C$20.00 per share have exercised in full their option to purchase an additional 1,050,000 common shares from the selling shareholders at the offering price.
The stock has suffered a bit of late, with shares of CWBHF taking a hit in recent action, down about -7% over the past week. In addition, the company has seen a jump in recent trading volume to the tune of 10% beyond what we have been seeing over the larger time frame.
According to the release, “The Offering was conducted by a syndicate of underwriters led by Canaccord Genuity Corp. and including Cormark Securities Inc., Eight Capital and PI Financial Corp. The Offering was conducted pursuant to the terms of an amended and restated underwriting agreement among the Company, the Underwriters and the Selling Shareholders dated May 13, 2019. The Company did not receive any proceeds from the sale of common shares by the Selling Shareholders under the Offering.”
Currently trading at a market capitalization of $1.38B, CWBHF has a significant war chest ($100.3M) of cash on the books, which compares with about $19.3M in total current liabilities. One should also note that debt has been growing over recent quarters. CWBHF is pulling in trailing 12-month revenues of $90.3M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 22.2%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $CWBHF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $CWBHF, either long or short, and we have not been compensated for this article.