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Or just caught up to TLRY, CGC, ACB in daily action, and then surpassed on a % basis.
But all moving pretty much together, even coming together on daily % move.
Curious if you or others have an estimate of NBEV's "fair value," and what analysis would underpin it?
Clearly this is a company that is not easy to value, and is probably worthless for short term trading. However, for me, it may be useful in determining option entries. For the sake of round numbers, let's say the shares do go to 6. At that point one could sell a Nov 4 put/Nov. 9 straddle, with strikes/leeway 33% below and 50% above that price. The duration would be only 3 1/2 weeks, and the premium looks like about $.75, or 12.5% of the underlying price.
For instance, curious what p/s ratio posters think is appropriate for the core products, what the forward 12 mo. core products sales will be, what the distribution business is worth, and ...
most difficult, what value can be assigned to new products, Enhanced Recovery, PediaAde (whenever??), and of course CBD, SKUs, with or without a hype value added.
What makes you so positive on the technicals now?
It's down two days in a row and has broken through what you called support just yesterday.
New CFO" succeeds John Price, who is departing for personal family reasons."
I guess those personal family reasons cropped up in the last two month, his tenure at NBEV.
Health Sciences Division "at the precipice of taking off at New Age." Wonder what that means for revenue and when...
They also said they'd be cash flow positive in the second half. Likely that means Q4 positive income will be greater than Q3 loss.
You cannot take the CBD movement out of the stock, because there's no way to know what's hype versus the potential magnitude. They've leaked out information about CBD piecemeal, so there's mo way to gauge its impact. Next step may be announcing a partnership or national roll out retail sale(s).
Perhaps they'll give company-wide Q4 guidance during the Q3 CC 2019. That figured to show good progress after overcoming the funding snafus, and before the CBD craze. Maybe they will be in a position to spell out 2019 new product scenarios, with at least some revenue quantification.
Until then, likely huge but waning volatility,
The convention was not over the weekend, as that misinformed tout sheet claims.
It's 10/8, today, through 10/10, Wednesday.
I would not expect any announcement until Thursday, if then. The most likely positive outcome would be partnership(s) with retailer(s) to launch the CBD drinks. Not likely, imo, that specific terms would be revealed, even if there is an announcement; maybe, some crowing about the reception, as is their MO.
Wouldn't sleep on Enhanced Recovery line either.
Of course because the market is a discounting mechanism, and the information will be known (therefore priced in), it won't matter that revenue won't show up in the next quarterly results. Isn't that the pedantic message you've been applying when you think it supports a bear case, along with the one minute charts?
"Unfortunately, that won't show up in the company's quarterly results for quite a while."
Is that what your 1 minute chart shows you today?
Is this then really any different than your 1 minute chart post yesterday, calling for yet another look out below?
You know, there were lower lows and lower highs twice today, and higher highs and higher lows also twice today.
Three positive takeaways from the interview, imo:
1) Launch of the Health Sciences Division is imminent.
2) A major national retailer will carry Marley Mate in both NBEV brand and private labeled, with shipment starting in December and expected to add an incremental $10M in revenue (presumably 2019).
3) Excitement about the CBD products at the retailer level has provided leverage for NBEV to at least attempt to negotiate, "You want to be first in, give us $50M business in our core brands ..."
I would take this last as a bit of Willis bravado, or whatever word you want to use, but, leverage or amount of leverage aside, bundling brands is an opportunity.
Eventually, the volume and volatility will settle down. In the meantime, before the size and reality of the CBD potential starts to reveal, there will be a CBD premium/hype and straddle sales will likely have diminishing but hugely high volatility premiums.
You draw what conclusion, for what time frame for that chart?
Maybe should show a series of ten 10 minute pots for the 11th 10 minute trade?
Exactly.
Thank you for confirming the 80-20 rule.
"Dilution is NEVER accretive."
OK. Fair enough, if referring to share count only. But the point is whether or not the share dilution is positive for shareholders or not. For instance, most all tech companies dilute shareholder interest in taking venture capital money. But the point is valuation. UBER shareholders, or any company's, are quite happy to own 1/10th the % of UBER if the valuation is 20x.
In NBEV's case, one upstanding thing Mr. Willis has done is take accountability for the financing fiasco. Had he issued shares a year ago at approximately today's price, the whole thing could have been avoided, and the company would be far better off.
When you harp on "dilution," and as in your example, assume that new capital lays dormant or is misused, it simply appears to pump a short book, imo. Because the real point is the effect on EPS, once funds are deployed. Irrelevantly, the immediate impact in this case is accretive, because the company loses money.
Of course, we don't know the longer term impact on EPS of a capital raise. But if NBEV wants to pursue a national footprint with new products, it will need more capital, plain and simple.
If it uses the new capital and fails in its efforts; yes, it would be dilutive to EPS and obviously hurt the share price. If it succeeds, the opposite.
Altitrade:
The offering is for dollars, not shares.
I already posted the line you quote. They do create ambiguity, but not on purpose, as can be verified by reading the whole filing.
Since you've consistently maintained that any issuance, apparently at any price, would be dilutive, will you please explain what you mean?
If raised funds are uses effectively eps can well increase, in which case it would be accretive.
Why is an at market share issuance necessarily bad?
More likely, imo, it will be good, because the company has the flexibility to access capital to finance a true nationwide launch of its new products, should it choose so. These include the surgery recovery products and PediaAde, as well as the CBD portfolio.
I'd anticipate a favorable PR after the convention, potentially providing the opportunity to obtain capital opportunistically.
If the company can absorb 20% dilution at $1.28 to get $10M cash they desperately needed, surely it could absorb say another 10% share increase to get say $20M - $40M which may well ultimately become cash on the balance sheet.
Best I can determine, both announced share changes are bullish, if anything (but I'm not a lawyer).
The Company's first line of the offering, as is usual with this company, unclear:
"Company may offer and sell from time to time up to an aggregate of $50 million shares of the Company’s common stock (the “Placement Shares”), through the Agent."
This can be interpreted either way. $s or shares. Really, tho, it's just a typo, as later in the document the $50M figure is cited, actually in aggregate up to $50M, not shares. And this is an at the market issuance, to be implemented from time to time. So, if you value the company using a p/e or p/s multiple after subtracting cash, there will be no dilution. There will be a flexible way to raise cash as needed, especially useful if major opportunities avail.
Again not a lawyer, and despite past dilutive issuances and misleading statements, imo the company is giving itself an option to raise cash quickly and as needed. Again, at market prices, which, presumably, they would attempt to execute opportunistically, and if used with proper execution, shareholder friendly.
Why would they need more capital after the recent debt and equity raises? Well, they are taking orders for the new CBD portfolio October 8th. They seem to want partners possibly to share an educational marketing program. We don't really know the status or timimg of the CBD portfolio and any immediate potential revenue spike. But we may have a hint; that being, a $10M to $12M fourth quarter incremental improvement to revenue attributed to something "proprietary." This was in an earlier presentation, itemizing the bridge to $90M - $110M in 2018 revenue.
If NBEV gets substantial orders for the CBD products, they're going to need cash to meet demand and to market properly.
In this scenario, one of many, some not so bullish, they may PR a revenue figure of orders taken at the convention. hopefully with more information like timing, plans, partners, gross margin, anticipated ramp, etc. This would very possibly create an ideal time to issue some new shares, say one or two million @ the then (~ Oct.10) market price. If this does indeed happen, the shares could be valued with entirely more rationality than they are now.
As for the conversion of common stock to preferred, it will have no effect on the fully diluted share count. Initially, I thought the reason was to create a new class of super voting shares. This does not appear to be the case. So, perhaps someone else knows the reason.
I've followed NBEV for quite a while. Before the CBD mania I intended to post both a bull case and bear, concluding that the risk reward favored the bull case.
Now, in the short term, as the float turns over ever few hours, it's simply a casino bet.
What's interesting is that the former reasons for the bear case are largely intact, while the bull case has added a huge wild card, characterized by the company's continued
Bear Case
1) For small companies management is extra important.
2) Applying a price to sales multiple based on beverage company peers has always been ridiculous/misleading, when 1/2 the revenue come from the distribution business, which is worth .5 x sales.
3) The company botched its financing, costing it at leases six months of growth, and more importantly,
4) Management has consistently intimated (or tweeted) factors relating to the financing(s) that were misleading at best, and borderline criminal at worst (quote the former CFO, "no, the financing does not involve any equity.), after consistent guidance or revenue indications that were never approached (recall "run rate of $80M" in early 2017; then $90M - $110M in early 2018)
What I find really interesting now is how similarly the company has "informed" the marketplace of its CBD product introduction. That is, the same type of FUD, and therefore rampant uncertainty and credibility issues exist for CBD as they did for the financing. That process led to huge price swings, which could have been avoided with some transparency. Ultimately, and importantly, the financing was successful. But it cost 20% dilution, while providing paper profits of about $10M+ to insiders who knew about the CBD products and likely the timing of announcements. And now, of course, there is an order of magnitude more volatility, again spawned by PR'd hints.
So, here's how they chose, and are choosing these CBD announcements. First a highly cryptic single line about testing in a presentation. Then, a filing for trademarks . And finally the company announces the "debut of its CBD product portfolio."
The release contains the following three statements, which simultaneously lend the best insight into the real status of the portfolio, while leaving investors with a gargantuan range of possibilities regarding the most salient issues: timing. terms, and potential sales.
1) "New Age intends to unveil its portfolio and category insights with select retail partners at the NACS show on October 8th"
Who cares that they will share insights. What does this mean? Do they have products now or not?
2) "New Age will be meeting with some of the major retailers in the country at NACS on October 8-10th and taking orders on a first come, first serve basis, given anticipated demand."
Okay, more likely that there are products, or there will be products. But when? Are these to be actual orders for immediate shipment or pre-orders for delivery in a month or two or six? Or are they really just reservations (with or without refundable or non-refundable deposit)?
3) Marley Marketing Manager is quoted, "have developed unique consumer insights and ... (will) share those insights with key retail partners. We ...intend to launch the most efficacious and safe CBD-infused products for consumers"
So , the products will be under the Marley brand?? Why not say and/or show the cans?"
"Intend to launch" What the hell does that mean?
So, given the company's history and IR approach, and keeping in mind that the company has followed through on its main mission (albeit, slower and with more than several major pitfalls), I'm curious what estimates board followers think, as to what announcement. if any, will be made post 10/8 - 10/10, when the "CBD portfolio" will actually be shippable, and what 2019 revenue range is likely.
Should be fun to watch from lift off to take off, as this one gets some recognition.
There aren't any marijuana related companies out there with half of INQD's potential selling under a $25M market cap.
Haven't sold a share. Just been busy.
HB,
Get your fingers ready.
Maybe you can run a contest for your people, the one to prove he/she has the last buy of the day (each day) gets some extra shares?
In addition to trendlines, triple bottoms, financing share overhang being depleted or not, moving averages, etc., the company pretty much just confirmed that in as little as three weeks, it will trade in Sweden.
There is no reason I can think of that trading in Sweden will add sellers, other than normal profit takers (which probably just moves them from U.S.), and every reason to believe it will add buyers.
Less than a month after FN trading commences, the company announces 2012 results, showing to a new audience that earnings are well above current pps.
And a month after that Q1 2013 earnings will be released, with triple digit YoY growth of revenues and earnings.
And somewhere in this time frame they will issue 2013 guidance.
And who knows, maybe some other operational news ...
Maybe just my bent, but all the technical stuff happens against a back drop of fundamentals.
A sustained move upward is self-reinforcing from a fundamental perspective, as well.
The worst 2013 dilution case is 30m shares sold to raise say $15M. At $1.00, it raises $30M. Much better, and much more self reinforcing, the same budgeted $15M takes "only" 15M shares, 10M at $1.50.
And this is without other financing alternatives.
My estimates would be 5% - 15% less revenue, with earnings dependent on future share issuance.
In 2013, I think that revenue from construction and service will be higher than 2012, because there will be new farms started, cattle and fish, as well as later stages of existing even producing farms. This will more than offset the ones that cease building and go 100% into product sales.
I think there's a chance we'll see ongoing expansion at most farms fr years (a la the prawn flies farm).
But I am talking on the order of 25% more revenues -- and this is a guess -- while total revenues will increase more along the lines RD indicates.
Therefore, cash sales from products will continue to increase fairly sharply as a percentage of overall.
There are also ongoing consulting and franchise fees that are not revenues from sales, but they are actually better: cash and in the case of franchise fees, margins of 100%.
$11M sales for fish. But cattle, fertilizer, HU, and restaurants are also non construction/ service revenue.
So too will be distribution, import/ export, later retail.
Little difficult to see, but conservatively looks like q3 alone was the first quarter ever with over 50% of revenue coming from sales.
Yes, momentum since the press release clearly shifted to the longs.
Pretty interesting, because the release really just confirmed what was already known about the FN listing, not even really expediting timing from any published expectations. Beyond that, simply said that a prospectus (known) and an update would be forthcoming (new, but just announcing news coming).
So, I have to conclude that the marketplace did not believe that the listing would happen, and now it does.
Perhaps this is premature, as it's only been 2+ days of trading, but with even consolidation obviously a new short term trend.
The encouraging thing is that I have to believe that the actual news when it happens will be more bullish that the news that it is in process.So, if the pps upward glides toward listing in 5 weeks, then benefits from a new receptive audience, the intermediate trend will have been broken too.
Good work, especially on the closes.
I'll defer to the TA guys: close above $.50, then $.56 paint better pictures.
Be great to have momentum into the upcoming reports and listing.
Lots of volume, and almost all trades on the ask. Any dumping MMs?
Could use a close like yesterday for a lot of reasons.
Say something funny.
HB
I am, that you would make such a post.
Andrew can buy back now where he sold -- maybe already has. Would be a pretty good move, as the shares at $.42 with today's announcement are a better buy than at $.42 when he sold, and there was no announcement.
Further, if the shares advance 15% on a press release that updates the schedule of a known event, plus announces an announcement to come, gotta believe that the actual announcement, and then the actual event are worth more.
Speaking of removing technical damage, step one would be someone hitting the ask on close above $.42; hopefully $.435+, higher the volume, the better. Any volunteers?
Any steady consolidation and climb before the company statement would be step two.
Pretty clear that they are shooting for FN trading to start before the 10K release and conference call. And there appears to be a couple week margin of error ( which they will probably need).
Penser buying and promoting was a very good point. Eligibility for fund buying might follow, particularly as they pass $250M NTA and approach $250M revenues.
I would like to see SIAF start promoting itself as an international company, distancing itself from the US listed Chiscam stain.
They will be a Chinese company doing business in China, bit also importing from Scandanavia, exporting to Southeast Asia and Europe, owning an interest in Malaysian restaurants, trading in The U.S. and Sweden, with plans to spin out subs to Hong Kong or Singapore.
It's a fantastic idea to update shareholders on operational and financing progress two weeks +/- before the new listing. re doing so is in itself very positive, imo. Afterall, why would they elect to do so without good news?
Of course, the proof will be in how they present the update. They specifically mentioned the five year plan and progress on the financing structure.
The past is the past, and we all pretty much agree that the current share price is mostly attributable to the financing structure, particularly last quarter.
I am sure that the operational update will be very positive; likewise, general progress against the five year plan.
The financing structure is more delicate. I expect they will reiterate the financing needs for capital development through 2013, as in the five year plan. Fair enough, if they change the way it has been done. If not, that segment of the progress report may dominate share price, as it has up until now, tho with less overhang on a percentage basis, presuming FN adds volume.
They have an opportunity to explain in believable terms why shares have been issued in the past regardless of pps. If they say that other options (debt or bond, slower growth, highly unlikely asset sale, private placement) are being actively pursued or prioritized, and that further equity financing is a secondary resort to be pursued only opportunistically (without saying it, meaning > $1.25), we will have everything we could ask for.
And the technical damage is really not that hard to repair.
Isn't the cost of goods the cattle coming into the Xining facilities. So, you are actually calculating a margin of 40% on the gross margin, instead of total.
Same as the fish coming into the farms at 250g is the cost of goods used as the major expense determining the margin.