Lotus Ventures- Buy the Dip
This buy the dip is going to be a short term hold and appears to be setting up similar to my trade on Bliss Co which I made over $2,000 on. So I won’t be getting to deep into the company etc, just looking at the chart and other data. After doing the Bliss trade, I thought it would be a while before I found another similar setup, just happened to start looking at Lotus Ventures. Might have to start scanning a little more diligently.
Why Buy the Dip
Let’s take a look at the trend, damn that looks ugly, trending down.
The question is, does it continue all the way down to previous lows of .21 (which was very temporary). Looking at the recent downturn, it appears the stock tested .29 and has rebounded back to .32. So looks like there is support at the .30 range.
Just like the Bliss trade, before I buy any Lotus Ventures, I will check into what early investors paid for shares.
Right in the slide deck, it says most of the shares were issued at 43 cents. That’s good to know, the stock is currently 10 cents under this price. Cannabis Wheaton- Auxly bought $1 million worth at .50
So far Auxly has put up 1 million, and should be putting up another 5 million soon at 3x the share price.
Shares under .43
The average doesn’t really matter if we know there are shares priced significantly lower.
Stock options granted/outstanding, this info is from March 2018. Looks like we found some shares that could be sold for a 60% profit today. Most likely these have already been unloaded during the peak, as you will see below.
This is the money shot, look at all the insider selling. They were unloading fast and furious, all the way down to the .40 range. At least insiders aren’t continuing to sell, but we could see more if the stock rebounds to the .40 level.
What Does it all mean
I’m basing this trade on what worked for me with Bliss, which could be dangerous. It might not work out the same way if there are things I have overlooked.
Some differences, Bliss is a producer with a cultivation license, where as Lotus is still trying to get theirs. While Bliss got an investment from Supreme, Lotus is doing a streaming deal with Auxly which means 50% of their profit is spoken for. (this could cause a lower valuation)
Bliss also started putting out press releases which helped pump up the stock a bit, almost like they were trying to fight off the cheap paper that was going free trading.
Market Cap Comparison
Just because the stock is trading near the low private placements, doesn’t necessarily mean its not priced to high. Have to compare the market cap to get a good idea.
Lotus Ventures 18 million, 25 million fully diluted
Blis Co 37 Million, 52 million fully diluted.
So Lotus is 50% cheaper than Bliss and is not too far behind. In April they received their confirmation of readiness from Health Canada, but it looks like their building will not be completed until August 2018.
Now the question is, what price do I buy in at. This won’t be accurate come Monday, but you can see the orders that were in on Friday. Most of the orders to buy are at .30 and the biggest sell order is at .35.
Every .01 is about 3.3%, on a $10,000 purchase that is $300. I don’t want to miss out on a decent move up because I was bidding at .30 and the stock only went to .31. Also don’t want to be impatient and buy at a higher price.
I’ve bought in at .31 for about 40,000 shares, depending if it fills completely.