Share price drop12 Sep 2023 09:44
My 2 cents, of course no investment advice:
The price drop in the last few days and especially today is completely irrational in my opinion. If it were a smaller position for me, I would buy with both hands. People seem to think that the worst case scenario is happening, which in my opinion is simply not the case. The sentiment around the company and its stock has long been driven by fears of a disposables ban in the UK. I think it's coming, but I don't think it's a worst-case scenario. Supreme made about £15 million from disposables last year. That's not even 20% of the vaping revenue, and the profit margin is much lower than the other vaping products. Would it be nice to have the disposables business? Of course, but it's not the driving force behind the company's success so far, and I expect Supreme to be successful without disposable products. Many people will switch to refillable or pod solutions, which Supreme already offers. By the way, disposable products are made in Asia, and the company doesn't have full control over them. I could even imagine that a ban on disposable products will be positive for Supreme in the long run.