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Dhaka Tribune

Chill Brands, CHLL, up 15% - possibly a little too much for the news?

It’s true that Chill has just solved a little problem in their US business. But is that worth 15%?

Update : 05 Jun 2023, 03:40 PM

Chill Brands (LON: CHLL) (OTCQB: CHBRF) shares are up 15% this morning and it's entirely possible to think that this is a bit of an over-reaction to the news. Solving just one of the myriad problems in bringing a product to market might not really be worth that much. On the other hand when a stock is fashionable then it's fashionable. Like loon pants or bell bottoms, issues can and do just feed on themselves. In such circumstances the investing - or speculating - difficulty is in knowing when the fashion is going to stop. As loon pants and bell bottoms did in their times.

The specific announcement today is that Chill Brands has solved the transport problem for its vapes in the US. Well, OK: “The Company has now secured relationships with specialist carriers and fulfillment providers that will facilitate the home delivery of its products to customers in all 50 US states. As referenced in the Company's announcement of 31 March 2023, the 2019 US Preventing All Cigarette Trafficking (PACT) Act prevents the United States Postal Service (USPS) from shipping vapour products regardless of their nicotine content. Similar restrictions have also been implemented by other major carriers. These shipping arrangements are therefore an important piece of the Company's infrastructure, as these regulatory constraints have prevented many competitor brands from making online direct-to-consumer sales.” We're really not sure that that is quite as big a breakthrough as some seem to be taking it as.

Chill Brands share price from London Stock Exchange

Now it is true that Chill is recently recapitalised. It's also true that vapes are a terribly stylish thing right now. So, there is indeed that American market to go for and well, why not? 

The answer is that many people have had plans to crack America before now and not all of them actually succeed. That is, Chill is really an option on being able to take that marketplace by storm. It does indeed seem that each successive announcement from the company adds a nother piece to the share price. We should probably assume that this will continue to happen until - if  - the bloom comes off. The big question then becomes well, if Chill will become unfashionable then when will that be? 

To us the decision point will be when the results of this marketing in the US become apparent. Apparently, it's this month that sales go live across the country. So, we should expect to see some actual sales figures in the autumn. Or, if they're good we'll see them earlier - it'll be the absence of sales numbers before the statutory reporting date that will tell us that they're bad.

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