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lol...a little harsh...but let's face it, Mitt Romney lost because his team was a little too white.
The image Musclepharm conveys doesn't include any Latino and Asian flavors for sure....apart from the fact that Tiger Woods is half Asian....but that's only something he endorses when in Asia.
Colin Kaepernick, Arnold Schwarzenegger, Johnny Manziel and Tiger Woods do represent some diversity....but the more the better imo.
An Asian girl and a Latino male athlete would not hurt imo.
Musclepharm should skip this line, keep the Hardcore line and rename it WARRIORS instead of Hardcore....just replace the name and keep everything else the same.
Where are the latino, black and asian influences in musclepharm?
Colin Kaepernick is not exactly the most Black you could find....and no Latino is representing the company, nor any Asian influences.
I know that West Coast and NYC Asian ladies are quite powerful...but apart from Jym Nutrition, Japanese inspired packaging...I see nothing.
call it babble....but I'm down with minorities and anybody that stand out from Jersey's hitler imbreds.
I want to see some color, some ass...something multi ethnic and powerful....and I believe it sells...just look at Victoria's Secret versus Abercrompie and Fitch...that pretty much looks like Stalinist and Fascist propaganda.
Brazilian, Cuban, Black, Asian...i'm down with that.
Not everything is New Jersey.
q4 results may be much better than what we anticipated...same thing with q1 guidance.
We assumed that we didn't hear anything from Musclepharm because it wasn't doing that well, as we assumed that the tough loan conditions from ANB indicated that Musclepharm was close to bankruptcy.
Now, we know better....We have been informed that Musclepharm is working on lowering it's manufacturing costs, by investing into and potentially acquirering Capstone Nutrition.
If we forget about the risk of dilution of stock and default on some corporate debt....it is all good news.
Could be that Musclepharm is doing fine, and that it just didn't tell us anything about the future, as to not breach any securities laws and to interfere in the negotiation of the deal with Capstone.
Whether Musclepharm buys Capstone or not, the deal is positive.
The numbers will talk as Deutsche Bank or any other investment bank, won't structure a fixed income deal without a satisfactory chance of success.
next year, Musclepharm might consider buying the 20% or 100% of Capstone Nutrition if it feels it is worth it, financing it with corporate debt and by selling the biozone assets in California.
Nice, it is exactly what Musclepharm is doing.....Are you psychic or was it Brad reading that?
Odessa99, I'm very impressed.
$27 might be what Musclepharm would be worth in an acqusition if the numbers add up. It's around $400 million and more or less what Dymatize was bought for.
The revenue is close to 3 times Dymatize, but $200 million corporate debt will be attached to that. Musclepharm's aggressive branding and multiple channel strategy will make the company grow much faster than Dymatize though. Capstone's hook up with Musclepharm might boost it's number of contracts, through referrals from bodybuilding.com and other Musclepharm connections in the industry.
So, $400 million seems reasonable for a company that would post double digit profits.....which I believe is what Brad was anticipating.
The deal could be what we needed. If numbers are good, then Musclepharm would have a state of the art manufacturing facility in Utah, the home of some of the largest health supplement vendors and manufacturers, like Nature' Sunshine, Solaray etc.
Selling and manufacturing supplements, including sports nutrition is huge in Utah. It is so essential, that the University of Utah teaches about this.
When we know the earnings of Capstone for 2014 and 2013, then we will know how good this deal is.
If Musclepharm based the rationale of the deal entirely on expected earnings of Capstone in 2015, that would be very alarming.
How good this deal is all depends on the numbers.
if Capstone Nutrition makes $20 million a year....then the deal is a non-brainer. If the amount is $10 million a year, then Musclepharm might go down.
Yup, 100% debt financing...that gotta be...because executives and board members hold many stocks and the INI guys could force them out if paid in stocks.
I guess it could be some sort of corporate bond issuance...with 7-8% interest.
The stock repurchase deal late last year from Cocrystal could have been an attempt to gain better control of the company prior to the announcement of this deal.
Also, Musclepharm is probably doing okay in terms of sales right now....and it probably sees some $20 million yearly cost savings from doing the deal. Problem is that the saving was capstone's profit.
It is not unlikely that the Capstone investors would vote Brad out, following an acquisition.
Making me believe the acquisition will be financed 100% with debt.
when you stretch a muscle too much, you injure a tendon and hurt yourself.....
The same applies in business. As much as we may admire Capstone Nutrition's manufacturing facility, it's a fact that it's too much of a financial burden for Musclepharm too hook up with it.
The Capstone investors run with the money, and we are left with even more bills than before....and more dilution of stock.
How would Musclepharm ever regain credibility with investors diluting the stock with 50%? Also, who says that the Capstone investors would vote for Brad?
You don't need to produce all the products you sell in America in America.
Paying plus $20 million a year in installments and interest payments for a manufacturing facility that is 3 times the size of what you need, becoming contract manufacturer when more and more food products are made in China is NUTS!
Quest Nutrition did it completely greenfield, from scratch....now manufacturing $400 million worth of protein bars after 5 years in business....
http://www.fosun.com/en/investment/investment_1.html
This is where Musclepharm should have been looking for a partnership....or hooked up with some Brazilian consultants and preferably Chilean, Mexican, Italian or Spanish partners that do business in Brazil. Musclepharm needs a partner that understands how foreign companies enter the Brazilian market and got all the necessary connections.
Why make it more complicated than what it is? Unless Musclepharm was buying a cheese factory in America, it's really hard to grasp the advantage of producing most powders there.
Musclepharm is turning into a contract manufacturer.
It makes no sense producing powder products for Walmart and Costco in America.
Brazil is a large international market, that currently may be experiencing hard times...but offers tremendous potential long term. Tariffs and import duties make it very restrictive to import American made products....so, the new production facility wouldn't help there.
Where my dad lives in Denmark you get your teeth knocked out by the Arab boys if you wear clothes with stars and stripes....Might be that the bank does the same to you, if all your products carry the stars and stripes logo.
We live in a Global world, producing entirely at home is old fashioned....and it is too damn expensive.
Starting out with something in the $40-60 million range....that is another story. If something goes wrong in the process, it will be easier to fix.
75% financing with bank would dilute the stock by 50% and be extremely costly in terms of interest and paying off loan....like more than $20 million per year.
Musclepharm cannot bear these costs. It would become a larger company struggling with interest payments and marketing costs....similar to Joe's Jeans that eventually went bankrupt after purchasing Hudson's Denim for $90 million.
It is very expensive to integrate two businesses....something Brad clearly is not taking into consideration.
Musclepharm should have looked for something in the $40-60 million range and then have considered having it's own team of people in China at some manufacturing plant over there.
Arnold Iron should not be made in USA.
Wynnefield Capital is not going to be happy with any of this.....acquiring a non exclusive manufacturing facility located in USA for $200 million when the stock price is under pressure is not the greatest move.
Brad will face a lot of questions in the next conference call.
I would start asking why he bought MSLP stocks at $13.6 a few months ago?
could be that the conclusion of the SEC investigation is forthcoming....and that an acquirer of Musclepharm is the one financing this?
It seems a little complex for Musclepharm to even dream of coming up with $200 million all alone, having a problem getting a minor line of credit at reasonable terms with a local bank...
when every Walmart, Costco, gas station and 7-eleven carry Musclepharm and Arnold Iron protein bars....at that point, I don't think anybody worries about what ranking Musclepharm got at bodybuilding.com.
It would be like following how many shoes Nike sells through overstock.com...
Anyways, I assume that down the road the Hardcore line gonna be one of the greatest sellers at bodybuilding.com and perhaps at GNC too..replacing the Arnold Iron line.
Musclepharm should reserve the Arnold Iron line for mass retail as it doesn't need to pay royalties to Arnold Schwarzenegger on more products than what it takes to extend the agreement.
Bellator_exec had a valid concern about selling the same product at half at Walmart, Sam's Club versus GNC and bodybuilding.com....it's not particularly credible to do so.
potentially, Musclepharm will be worth the double of Dymatize.
I guess Musclepharm is expected to reach $250-300 million revenue in 2016 then....and I guess that the conclusion of the SEC investigation is forthcoming.
Capstone Nutrition are probably good at what they do....but the combination with a strong sports nutrition brand seemed attractive to management and owners.
That transaction is pretty much a non-brainer.....I assume the value of Capstone is around $40-50 million....together, the company will be worth like $400-600 million in an acquisition.
Musclepharm is going to make a lot of money on protein bars.
Earnings is what is needed, lets not fool ourselves!
Free cash flows from dilution is exhausted with the current stock price and Frost's departure....free cash flows from more loans is not gonna be easy before Musclepharm turns a profit.
LOL...Musclepharm has no other choice than making money at this stage....from where else should the cash to expansion come from?
It is now or never. Musclepharm got what it takes to succeed....in terms of retail partners and products.
The Hardcore name is STUPID...but the product's packaging looks good and the ingredients are good....so, that line could easily become complementary to the Arnold Iron line, with no association and competition with Walmart and with no royalty payments attached.
I'm quite certain that Musclepharm could get some better terms on a loan than what it got with ANB bank.
We are not in 2009 anylonger...so, there are risk takers out there.
I guess Musclepharm might be planning a line of Arnold Schwarzenegger clothing for Walmart.
Arnold is somewhat of a cult figure....so, I'm sure that such a line could sell pretty well...like more than $5 million per year...
I might even buy some Arnold Schwarzenegger sports underpants...
okay, Musclepharm masters sales and marketing.
Now, Musclepharm needs to master accounting, corporate finance and corporate governance a whole lot better to really shine.
Musclepharm's business model demands higher revenues for profitability because achieving explosive growth comes at a price.
high profile endorsements and sponsorships don't come cheap....highly motivated employees neither.
Now the cash at hand is getting a little tight...partly because Brad bought back stocks with money meant to replenish office equipment (depreciation expense). This shows that the company lacks some financial discipline for sure....but I sense that Musclepharm will make it big with the MP Combat Crunch.
That would be huge for Musclepharm shareholders if that was the case.
It would be nice getting back to $10 soon and it would nice if Musclepharm could give the loan officers at ANB Bank a one-fingered salute.
Not everything in life is for show.
ANB bank is some small local bank in Denver that is part of a financial group with $2 billion in assets.
Musclepharm needed some cash while under SEC investigation...and it didn't have much time....so, it took whatever it could take.
The decision can be changed anytime it wants to.
It ain't pretty and probably not the optimal conditions for Musclepharm....but that's life! Down the road, if Musclepharm makes it big....perhaps it will realize that ANB Bank is not the place to bank anymore.
It would be nice to know where Musclepharm is going to sell the new energy drink?
What MP branded products does Musclepharm produce in California?
Musclepharm did issue stocks, but they will be void if it doesn't default....
So, until these stock leave the treasury of the financial institution....they should still count in the fully diluted share count....which cannot be ideal by any means.
I have to admit, I have never seen this construction of a secured loan ever before, and it makes you wonder why Brad would go along with something like that given Musclepharm's history of excessive dilution?
I think that Musclepharm is in desperate need of a more seasoned CFO with experience from highly profitable company.
Musclepharm is like 18 yr old Joe Blow from Jonesboro, Arkansas that applies to get his first credit card.
The local credit union tells Joe Blow to get a secured credit card first because the credit history is blank, apart from a collection at the local hospital for an emergency treatment last year.
So, Joe Blow deposits $500 at his share account at the credit union to get a credit card with $500 credit line....and all of the sudden, Joe Blow got credit.