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I have a feeling that Musclepharm soon will trade above $9...perhaps within 10 trading days or so.
Musclepharm will reach $12.50 again this year, perhaps even during the first half of the year.
Brad is forced to cool down, the SEC investigation affects the company's creditworthiness...he got little room for lavish salaries and any overspending. Dilution is out of the question. Musclepharm sells well though, and that saves us all.
Dymatize was expected to make approx. $38 EBITDA in 2014 on $200 million (my guess of revenue as revenue was $145 million in 2013 with EBITBA of $23 million). The $38 EBITDA expectation was given by Post Holdings.
Let's assume that depreciation is like $8 million, that gives us $30 million net income before taxes.
Let's compare to Musclepharm that generally sells it's products at a premium to Dymatize. So, with approx. $200 million revenue and assumed same efficiency of operations, deducting the manufacturing cost disadvantage of $15 million and the cost of endorsements and sponsorships of $13 million. I see Musclepharm as very close to break even.
Not only that, with same efficiency as Dymatize, and similar prices at Costco and Sam's club to what Dymatize sells for through specialty retailers.
Man, I see that MSLP stock flying through the roof when Musclepharm breaks $250 million dollars revenue.
Dymatize might have a cost advantage over Musclepharm and spend less per sold unit, but Musclepharm is doing okay, it's in Walmart, Sam's Club, GNC and Costco at same time, and it's prices are high.
There is a protein movement going on, and Musclepharm is the one with the exciting packaging that looks familiar to the American junk food we all love.
okay, let's put it this way.
After 20 years, is it better to sell for $150 million or for $2 billion?
Musclepharm will continue to grow, it grows faster than anybody else.
Brad got a vision, he just needs to give everybody else a chance to see it before he writes himself the next million dollar check.
Legitimately, Brad can make himself a very rich man by continuing to grow in America and abroad and turn Musclepharm into a profitable operation.
correction....brad should be entitled to a few hundred thousand shares on top of the million shares he has already been granted.
It's not 100% certain that he will grant any shares in 2015 given the poor performance of the stock.
Analysts and institutional investors could take notice of a CEO that dilutes a depressed stock, no matter how low it is.
the 2014 stock dilution is to blame for much of the low stock price right now....The company's market cap has grown in 2014, that is worth noticing.
No stock dilution or 1-2% stock dilution in 2015 is very likely, as most of the compensation based stock dilution and the near term endorsement based stock dilution is well behind Musclepharm.
Musclepharm might have planned to finance an acquisition with stocks, but that will have to wait for now.
Musclepharm will continue to focus on branding and sales, but with an ambition to become profitable.
Over the next few years, Brad should probably tone down his own compensation a little bit, because it's easier to make your employees work harder when the CEO is not making millions on their expense. As long as Musclepharm is a small public company, every single employee knows exactly how much the boss is making. Brad was a founder that built up the company, he deserved a large stock holding as incentive....but he needs to let the company make some money before he can write himself multi million dollar salaries...A company that doesn't make money quarter after quarter will eventually fail.
If the stock dilution madness doesn't stop, yeah, then the market cap will suffer and the stock will likely be $3-4. I have to say that I do see a lot of small companies in the US fail because of executive greed....I don't see much of that in Denmark to be honest, there the belief in the team is greater for sure...
Brad got a million shares though, and he should be entitled to a few million more if he uses the remaining 1 million stocks authorized for compensation....That should be incentive enough for him to get this stock back to $14 as soon as possible.
Brad lost half his net worth over 2 months, that's not cool for him!
never say never! $20 would make Musclepharm worth as much as Skullcandy. Honestly, I think Musclepharm got a brighter future than that company.
Musclepharm lacks own manufacturing and that separates it from Dymatize in terms of cost structure. Just don't forget that it took Dymatize 20 years to reach the sales that Musclepharm got in 4 years.
So, what's best for investors? To grow organically and to focus on manufacturing that takes 20 years to get somewhere....or alternatively to focus on sales and innovative branding and get somewhere in like 5-6 years?
Most companies' problem is sales, they got the good product and the low costs....but they got a hard time selling their products.
Apple is much less involved in the manufacturing of it's products than Samsung or Sony, yet Apple sells more.
Paulo Santos, Codie, Bellator_Exec, myself included.....what we think doesn't change anything.
Musclepharm numbers were not too encouraging for q3, but Musclepharm did buy it's stock back at $10 in the beginning of q4 though....that is worth to remember. Also, more than halfway into q4, Musclepharm didn't promise too much bottom line in q4, but believed in it's revenue.
Actually, Musclepharm was so satisfied with revenue that it didn't even bother to promote it's products aggressively during the holidays.
That shows that Musclepharm does care about margins and that Musclepharm does try not to lose too much money.
I think this was the beginning to a shift where Musclepharm tries to incentivize employees to improve capital return and maximize profits over revenue growth at any cost.
Musclepharm is getting more conservative, and it is striving to grow revenues towards critical mass levels in q1 or q2 with the aim to become profitable, and not just to impress investors with higher revenue numbers.
I wish I could buy, but I have to stick to my Eletrobras position for now.
Eletrobras not going back up until Brazil changes the electricity rates and there comes a whole lot more rain in Brazil.
It's the rain season now though, and electricity rates are anticipated to rise....so, let's see if I get some chance to switch my position over to some more Musclepharm stocks before the price goes up.
Musclepharm surely is a cheap stock now.
MSLP is a $20 stock by the end of the year, just wait and see. Musclepharm will reach the critical mass in a few months, and after that it will thrive and become very big. I'm quite certain about that.
Competitors are peeing in their pants about this, trying to spread bad news about Musclepharm to SEC, law offices, etc. It ain't gonna work though.
Musclepharm is definitely a $10 stock because it ain't so hard to make money going forward.
That Musclepharm doesn't have it's own manufacturing...so what? tell me some American companies that got their own manufacturing?
American companies typically have their manufacturing outsourced, as it cuts risks and ultimately, manufacturing in America is a bad idea with a strong dollar.
China, Brazil, Mexico, Slovakia, Spain etc....these are the places where manufacturing jobs go right now. America is a terrible place for manufacturing....now more than ever.
Imo Musclepharm should have most of it's products made in China, in Brazil and in Slovakia by contract manufacturers going forward and only let the high margin protein bars be made in countries like USA, Canada, Belgium, etc. Whether a protein powder is manufactured in Mexico or USA, who cares?
Nobody is too excited about snacks made in Mexico though.
everybody makes mistakes!
I bought one of those boxes with 30 snickers, m&ms and Twix bars at Costco in October. Some weeks later I received a letter with an apology from Mars Corporation that the number of bars in some container were off the promised number and that I could call for another box if I wanted to.
I never did anything, I threw the letter away, because I'm done with the transaction and I was happy with what I got.
Same thing here, Musclepharm might have to send out a letter to buyers of the product, if a batch was suspected as having ratios off.....and most of those that receive the letter would do like me, throw the letter away as they wouldn't bother wasting their time over $50.
It is what it is: not important!
This case has relavance to one law office, there is little to lose for investors and Musclepharm.
Musclepharm has an agreement with Arnold Schwarzenegger, an expensive contractual agreement, so messing with ratios of ingredients intentionally is out of the question. Could there be isolated cases where ratios are off? it's possible if the contract manufacturer is not doing a great job with a batch...
Systematic and intentional fraud by Musclepharm, it's not happening!
There is no evidence that Musclepharm is particularly worried about any of this, as it hasn't withdrawn any products.
Most likely it is a law office trying to squeeze money out of Musclepharm.
so how come Musclepharm is not recalling any Iron Mass products?
Have you never heard of lawyers coming up with frivolous lawsuits against companies over patent breaches and misleading marketing?
Why was only one product tested from one vendor?
The case is 100% bullshit!
codie e bellator_exec son extraterrestres.....lol, what am I writing, it makes no sense!
Stock will go up because:
1) little employee compensation dilution going forward, approx 1 million shares are authorized to employee compensation, and Tiger Woods, Arnold Schwarzenegger and Phillip Frost don't allow more.
2) no acquisition related dilution because stock is too cheap
3) no pipe deal related dilution because stock is too cheap
4) lawsuit not so threatening as it concerns one of the less sold protein products of Musclepharm. So, a settlement, if any would be in the hundred of thousands, not millions.
5) Arnold Schwarzenegger will stay with Musclepharm for 9 years, mark my words, 9 years!
6) The MP Combat Crunch sales could become 100 million bars a year, if it gets into Walmart, Costco and 7-eleven, and the sales could be millions in Europe, Brazil, Japan, Australia if it becomes really popular
7) Musclepharm's water bottle design was pretty damn good...I'm very optimistic about the RTD product category
8) some prominent creditor will most likely give Musclepharm a loan, pretty soon, because Phillip Frost being the chairman of the board of Teva and being a billionaire can make things happen
I consider this to be a positive if indeed that was the case.
The management and board had 3 million shares that were authorized to issue to employees from 2013 and beyond. This was probably Frost's restriction to give them money in the pipe deal of 2013.
Surprisingly, Musclepharm issued half of the 3 million shares in 2014. It makes you wonder whether those shares were issued so fast to cover employees from potential charges from the SEC investigation?
The SEC might tell employees to cancel stock grants as a compensation to investors, and if the employees didn't have any stock grants yet, they might have have a problem paying a compensation.
No, I'm up....but it doesn't take much to bring me down....I own close to 26,000 stocks and I might buy another few thousand after reading the Arnold Schwarzenegger agreement....so, a little bit down, and I'm even steven or completely hellass.
yup, that's right....but I sold lots at $13.85....and I bought again at lower levels....so, all in all, I'm up $14,000.
I'm still up $14,000, so I haven't lost any money....it's a little bit off the $144,000 I was up when the stock traded at $14...nevertheless, I'm up!
I'm not too worried about the Class Action as it is very unlikely that Musclepharm did anything wrong. Remember, Musclepharm has to meet certain sales numbers to be able to extend the agreement with the terminator for another 6 years.
lots of psychology behind the move in the stock price and not necessarily so much reality.
Fact is that we have a quite good feeling about where Musclepharm is in terms of revenues and earnings based on the q3 earnings report and conference call.
Revenues are up and earnings are not too great, actually negative.
Musclepharm wants to provide a better guidance into the current quarter and the following quarter before it drops the bomb, announcing the loss of q4.
None of Musclepharm's attempts at controlling the emotions of investors helped, and here we are. The stock dropped to $7.
I wouldn't put too much emphasis on any of that. All I know is that people are out there spending money in bricks and mortar big box retailers as well as over the Internet. Also, I think that Musclepharm could reach sales of $60-100 in the protein bar product category over the next 24 months and that it will make good money on that category.
Musclepharm is not a stock that should be priced below $10-14 price range.
Even if Musclepharm losses a little bit now, down the road it is in a growing sector and it will do just fine.
There is nothing that will stop the protein movement and Musclepharm is part of that movement quite strongly, better than Glanbia, better than MuscleTech and better than Cellucor in terms of branding.
Brad doesn't want to disappoint his stakeholders, so he will change and become more likable from a shareholder's standpoint. Something definitely gotta give with the stock hitting the bottom again with $7, that is almost a drop of 50% from last time Brad endorsed the stock, buying at $13.60
Musclepharm needs to do something better next time and stop delaying announcements that contain less encouraging information. Keeping investors in the dark is not the right thing to do.
The Schwarzenegger agreement is good.
I didn't cause the stock to drop today, but I did express concerns regarding the Arnold Schwarzenegger deal only lasting three years, referring to some information I picked up in one of those blogs that insinuate that something is wrong with Musclepharm.
So, let's see what the exact wording of the Schwarzenegger agreement is regarding the three years:
The Agreement shall have an initial term of three (3) years commencing on July 26, 2013, however, the Agreement shall automatically extend for two additional three-year terms if certain net sales milestones are met, as specified in the Agreement.
sales are most likely okay at the moment. Yesterday, I saw two shopping carts at Costco with the MP Combat in them, so it might be that this channel is doing quite well.
Walmart and Costco are both benefiting from the low price of gas for sure, so that could translate into good sales numbers for the current quarter.
I'm very optimistic about the protein bar segment, as protein bars are priced very high Worldwide, so lots of $$$$ if Musclepharm gets it right. Musclepharm needs to be on the ball with different flavors, different colors of packaging, whatever it takes to become a leader in the sportsnutrition muscle branded category of protein bars.
Quest Nutrition is the winner in this non muscle branded category of protein bars, and should continue to be a source of inspiration for Musclepharm.
It would make sense if Musclepharm tried to establish a contact to a creditor like Banco Santander that is big in America, Brazil and Europe so that it can take full advantage of the Worldwide protein wave through export, foreign investments and foreign licensing partners.
I think Musclepharm should pursue the strategy of expanding the MP line, particular in the RTD and protein bar categories and try to sell it Worldwide similar to Quest Nutrition.
Also, it needs to diversify exposure to endorsements, expanding with Tiger Woods endorsed products versus Arnold Schwarzenegger products, never give one endorser too much bargaining power over another endorser.
Musclepharm's business model is a little tricky as it takes very high revenues to make money....
LOL..in Danish, Dakota aben translates to "the Dakota monkey"...
Humble Musclepharm? please!
Many other start up companies issue lots of stocks initially to management and board, but Musclepharm got like a three-tier dilution structure, issuing lots of stocks in pipe deals with prominent investors and to endorsers as well.
So, until Musclepharm starts making some money and reduces it's dilution, the stock price will fluctuate up and down.
Musclepharm cannot expect much from investors being a highly dilutive public company. Musclepharm issues a ton of stocks each year to short term endorsements deals and to management and board members as stock grants that are vested over few years, while not being profitable at the same time. Not cool!
How could Musclepharm dilute the stock with 20% in 2014 when it didn't raise any capital but bought back stocks? it doesn't make any sense!
Musclepharm needs breathing room from stock dilutions and it needs to change it's direction towards selling branded quality protein products that sell by themselves like Premier Protein and Quest Nutrition products.
The equity compensation and equity endorsement business model is completely broken!
Arnold Schwarzenegger is getting a free ride, and so are many others in the management, endorsement and lead investor group of Musclepharm.
Arnold Schwarzenegger managed to get his line into big box retailers that fits him well as he receives royalties on each product sold, so volume is king.
Let's be honest, the big box retail channel is the winner now, so good for him....but what about us? Shouldn't Musclepharm have demanded an extension of the endorsement contract in return for making his product available at Walmart and Sam's Club? C'mon!
All these weaknesses in the contracts of Musclepharm, where the pure principals, the institutional investors and the retail investors, time after time get screwed by the agents is bullshit.
It is well documented how Musclepharm twice has reinvented itself in the public market with a nice facade that starts to crumble down the road.
I would like to see something else from Musclepharm in 2015!
the management needs to be very humble until we get back to $11-12 level again.
There is a complete lack of confidence in the management because of the many dilutions.
Musclepharm needs to make it clear to investors, to employees, to Arnold Schwarzenegger, to Phillip Frost and others....that MUSCLEPHARM IS NOT AN ATM spitting out stocks every now and then.
The excessive dilution killed Musclepharm, as the profits didn't show.
By profits I refer to earnings in excess of $1 million each quarter, that consistently grow over time. Musclepharm has had enough time to be able to make a buck of it's huge revenues.
Musclepharm will probably break $200 million revenue this year, ex. all the bullshit revenue....such a business should make money, even if endorsements are expensive, even if it uses co-packers. Losing money with such a revenue is nuts!
Investors need to put on the Angela Merkel fist. We want to see some money being made!
competitors are behind many of these lawsuits, that is obvious.
Musclepharm is innocent until proven guilty, so I bet this web-site could get sued for implying that there is something wrong with Musclepharm's products because there is a class action lawsuit against it. If I were Musclepharm, I would have a lawyer take a look at this web-site.
Notice that Glanbia expanded in the non muscle brand category with the Isopure purchase, and notice that Post Holdings is competing in both brand categories as well, with purchasing both Dymatize and Premier Protein.
Premier Protein products are sort of very concentrated, but the image of the company is not as tied to muscle building as many other brands.
Musclepharm should consider a "non muscle" line of products. A line similar to Premier Protein, Clif Bar and Quest Nutrition that doesn't carry the name Muscle or Musclepharm.
Such a line could be huge if done the right way. It should be entirely separated from the Musclepharm brand. It should be so that most people wouldn't even know that the product was sold by Musclepharm.
The mass market protein wave is huge and it is Worldwide. Quest Nutrition is the winner in the non muscle brand category, while Muscle Milk is the winner in the muscle and sports nutrition category.
I believe Musclepharm can be in both, as the products are very close. The muscle branded products will sell very well as the non muscle branded products will. There will be some overlap between the two, but there will be huge chunks of the market that will choose one side over the other.
Some Quest protein bar consumers would never consider buying a Musclepharm protein bar, and some MP Combat Crunch buyers would never consider buying Quest protein bars. It's all about the message that the products are sending.
the protein wave has reached Europe. Today, the Danish national broadcaster, DR, had an educational program about protein enriched products.
In Denmark, one of the most popular protein enriched product is a low fat high protein Yogurt made according to Icelandic recipe, the product is called STYR.
The program featured different protein bars, and most of them were rated negatively for containing too much sugar, apart from Quest protein bars sold in Denmark. It was stated that Muscle Milk was meant exclusively for those that go to the gym to build muscles....because of the name. Hmm, I guess Musclepharm might cause confusion in the mass market segment in Europe.
The conclusion of the program was that most young people get enough protein through their diet, but that some older people were deficient. Also, it was stated that you would obtain the best use of the protein consumed if you trained a lot.
http://www.dr.dk/tv/se/madmagasinet-bitz-frisk/madmagasinet-17
I'm sorry...it was my mistake.
Musclepharm should hire some really professional speech coaches for athletes like Colin Kaepernick and Johnny Manziel. Somebody that can teach them how to talk....their teams obviously don't do that
I think some of the basket ball teams put more effort into teaching their players how to talk straight than the football teams do.
Musclepharm needs to get into 7-Eleven...it is a must with the MP Combat Crunch.