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Re: Toxic Avenger post# 5704

Saturday, 01/14/2017 3:52:23 PM

Saturday, January 14, 2017 3:52:23 PM

Post# of 8799

At some point though you need to make a profit. Buying revenue growth works for small OTC companies up to a point, but with CELH's valuation over $100 million, they need to find a way to at least positive cash flow from Ops, if not profits. It's helped that they've had a source of ready cash, first from CDS and now from a Chinese billionaire, but the fact that they seem to rely on large infusions of cash is not a good sign for the long haul, especially if they ever want to get listed on an exchange.



Would you have said the same thing of Bai, which just sold for $1.7B? They had $125M in TTM revenues and lost $10M over the same TTM. They were bought because they had proven they could scale, and quickly. Profit was a secondary concern because the buyer (DPS) has economies of scale that Bai couldn't achieve organically, at least in the short-term, so the expense structure (i.e., profit) is a secondary consideration.

BAI isn't a one-off consideration either. Lots of accumulation is occurring in this sector. Tectonic shifts are occuring and will continue.

You bet differently when you have a lot of chips or hardly any chips.

CELH has proven they can turn a profit, doing so 2 quarters in a row before Uncle Rush and his money came to town. With their strong gross margins, it's easy to see why. With scale, the math is clear that the profits will come in 2017.

Now, they have a lot of chips on the table and are playing this hand to see how far they can go. I, for one, applaud the play.
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