I'm afraid that high dilution going forward would be a sign of lack of conviction that the stock price would ever go substantially higher.
If we get past $14 again, then the price would most likely jump to $20-30. The reason is that such a move would be a matter of complete success for Musclepharm. Musclepharm would have turned into another Cytosport or Quest Nutrition kind of company, with endless opportunities in the food and beverage industry.
On the other hand, if Musclepharm is not so much of a success, it would likely need a whole lot more cash, meaning that more capital raises would be very likely. With the short sighted nature of the company thus far, creditors probably wouldn't line up. Somebody who doesn't believe it can make it, would just print more stocks or money like the Fed and the ECB. More liquidity, more time to adjust to an underlying weak performance.
In Europe where the governments don't want to adjust to realities, but spend more than what creditors feel comfortable about and what makes sense, there you feel the pain. Same thing with a company that wants to spend too much on compensation and marketing, before the revenues are there to support it. It is good to invest into the future, but only so much that there can be generated a revenue to support the investment fast enough.
I truly hope that Musclepharm focuses on the revenue and profit side in 2015, and back off with the cost and dilution side until it's known 100% that there can be generated sufficient revenues by the operation to make a profit. When a company is profitable, then it is time to reward employees as well as shareholders generously. Like in Europe, you should not reward anybody before you got the money.
