A Bottom Signal for TILT Holdings Inc (OTCMKTS:SVVTF)?

A Bottom Signal for TILT Holdings Inc (OTCMKTS:SVVTF)?


Shares of TILT Holdings Inc (OTCMKTS:SVVTF) have been trending lower over the last 6 months, but Friday’s action represented a strong sign, with the stock closing up after making a fresh multi-month low intraday. That’s the type of reversal of which we take note, and we will have a close eye on this one this week. To make matters more interesting, the company just announced the appointment of current Board member and interim Chief Executive Officer, Mark Scatterday, as Chairman of the Board of Directors of the Company, as well as the results of the annual general and special meeting of shareholders of TILT.

According to the release, “TILT announces that all items of business put before Shareholders at the Meeting were successfully passed, including: the fixing of the number of directors of TILT at six; the election of Mark Cole, Geoff Hamm, Gary Smith, Mark Scatterday, Robert Calhoun and Joel Milton as directors of the Company to hold office until their successors are elected at the next annual general meeting of the Company; the appointment of MNP LLP as auditor of the Company and the authorization of the directors of the Company to fix their remuneration; and the approval of an amendment to the articles of the Company (the “Articles”) to require an affirmative vote of at least a majority of the directors in office at the time of such vote for certain major decisions, as more particularly set forth in the management information circular of the Company dated May 9, 2019.”

TILT Holdings Inc (OTCMKTS:SVVTF) trumpets itself as a vertically-integrated technology and infrastructure company, engages in the provision of various products and services in the cannabis industry.

It focuses on the production and delivering genetically researched cannabis products through the wholesale market in partnership with retail operators; and provision of software and services that help retail partners in connecting with retail customers with knowledge based promotional activities.

The company is based in Vancouver, Canada.

According to company materials, “TILT is a leading provider of products and services to businesses operating in the cannabis industry. The Company offers the contract manufacturing of marijuana in a variety of form factors, vaporizer and inhalation devices, business and consumer delivery services and a broad suite of software products for over 1,500 retailers and brands throughout the United States (“U.S.”), Canada and Europe. The majority of TILT’s products are customized to client specifications and branding, all enabling them to operate their businesses more efficiently and connect with their customers more effectively. The Company is organized in two main business units, Software & Services and Consumer Devices & Packaged Goods, designed to augment competencies across the organization in research, manufacturing, packaging and technology to deliver end-to-end services and customer solutions. All of TILT’s products are supported by an extensive research process led by scientists and engineers, who use data analytics and discovery to produce new products, helping shape the industry. Headquartered in Cambridge, MA, with offices throughout the U.S., Toronto and London, TILT has over 500 employees and has sales in 40 U.S. states, Canada and Europe.”

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As noted above, SVVTF just announced the appointment of current Board member and interim Chief Executive Officer, Mark Scatterday, as Chairman of the Board of Directors of the Company, as well as the results of the annual general and special meeting of shareholders of TILT.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action SVVTF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -10% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -32%.

In addition, the stock has registered increased average transaction volume recently, with the past month seeing 73% over the long run average.

Mark Scatterday said the following: “It is a privilege to be named by the Board as Chairman. We are changing the cultural focus of the company and assembling a team to operate and optimize our unparalleled portfolio of assets. I look forward to assuming my new responsibilities as Chairman of the Board and I intend to ensure that we continue to grow TILT to achieve profitability, and to maintain our momentum in 2019.”

At this time, carrying a capital value in the market of $131M, SVVTF has a significant war chest ($7.3M) of cash on the books, which must be weighed relative to about $1.7M in total current liabilities. One should also note that debt has been growing over recent quarters. The company is pre-revenue at this point. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $SVVTF 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 $SVVTF, either long or short, and we have not been compensated for this article.

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