My little babies are growing up.
Well, two of them are while the others will get there. And by growing up, I mean up-listing, although these two still have a ways to go to reach a $1 billion market cap.
Both Cybin Inc. (CLXPF) and Draganfly Inc. (DFLYF) announced Wednesday after the bell that each will be moving up from the OTC markets to a big board. Cybin will list on the New York Stock Exchange under the ticker symbol CYBN with trading expected to begin in the next 10 business days while Draganfly will move to the Nasdaq and trade under the ticker symbol DPRO beginning next Friday, July 30. Cybin and Draganfly are two of the companies I highlighted last month as among my Billion Dollar Bets.
Cybin appears ready to go in terms of share structure and price while Draganfly will implement a 1-for-5 reverse split. That means price will rise five-fold while an investor's share count will drop 80%. For example, if you had 500 Draganfly shares and DFLYF was priced at $1 before the reverse split, you will have 100 shares priced at $5 after the reverse split. The value is still $500 either way you look at it.
Cybin's move to the NYSE puts it in rarified air. It will be the only psychedelic pharmaceutical name on that exchange. There are a handful of names trading on the Nasdaq, all with a higher market cap than Cybin, but I still contend Cybin is one of the highest-quality names, if not at the top.
Draganfly won't be the only Nasdaq-listed drone-related name. By the time it up-lists, it will fall between AgEagle Aerial Systems (UAVS) and Red Cat Holdings (RCAT) , but I believe it shows the most upside of the three names at present.
Draganfly doesn't compete directly with either AgEagle or Red Cat, but it will in some areas. The company did file to potentially raise money in conjunction with its move to the Nasdaq. The offering appears to be in the range of $15 million to $25 million.
While Draganfly possesses a strong balance sheet in terms of cash, the industry remains active and ripe for consolidation. If the company strengthens its cash position, it should be able to grow organically as well as through acquisition.
Red Cat recently saw its stock skyrocket after acquiring Teal Drones. At the time, Red Cat had less than $500,000 cash at the start of the year. The announcement came without terms but shares of RCAT more than doubled in four days. Red Cat used the move to its advantage to raise $60 million at $4.50 per share. Impressive for a company that began the month with a market cap less than the cash it raised in a single day. Earlier this year, it executed an offering at $4 a share prior the sale of stock at $4.50 a share. Red Cat management has done a great job of selling into big market pops on the stock.
AgEagle has been the name that appears to have missed the window for raising capital. It won't shock me to see UAVS fade from the top market cap of these three companies to the bottom over the next 18 months.
Draganfly and Red Cat both will have big cash war chests come the beginning of August. If AgEagle was smart, it would try to use its large market cap and acquire one of the two via a stock transaction, although I'm not sure either would accept or whether UAVS could offer enough. Instead, they'll soon be forced to make an offer in the hole while the other two continue to grow both organically and via acquisition.
As it stands, my money is still on Draganfly but I'm watching Red Cat as well.