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I understand where you are coming from, but stock options vested to ex employees years after their departure and stocks granted to ex top athletes like tiger woods....such issues should be questioned.
The only ones that don't want to listen to any of this are insiders of the company. The insiders prefer as much information asymmetry between them and the outside for as long as possible...but Sydney Rollock resigned, and the madness came forth. BUSTED!
Hopefully, more common sense equity compensation plans are drawn going forward...otherwise we are fcked!
and hopefully, tiger woods will be deployed in more value adding ways going forward. As of today, he has created zero value to Musclepharm.
Im holding 14600 shares of Musclepharm so why should I try to get the stock lower? Im not making up conspiracy theories ...The equity compensation plan at Musclepharm stinks...it is a huge draw as is the SEC investigation.
Intelligent persons in the management would have drawn up some better terms for the company.
Would I buy if Musclepharm goes lower...probably if it goes way lower and perhaps if some good news arise going forward...but Im comfortable with my reduced position for now. For now, it looks like a wise decision.
Musclepharm got some equity compensation and accounting mess on the negative side and Musclepharm got some growth and marketing strength on the positive side...Any investor has to weigh these two against each other to assess what the stock is worth.
This kind of equity compensation is completely wasteful and disrespectful to the shareholders. Also, it makes you wonder if there won't be much more stock option grants given next year to retain employees...because if you get all the unvested stock options of the future, only incentive to stay should be the promise of more stock grants.
Vested, unvested means little at Musclepharm...other than when you can get the equity...not whether youll get it. Youll get it, don't worry!
Incentive with zero exercise price is kind of weak. Let's say the exercise price is $10, and the stock drops to $11 from $15 because of poor performance of the company...that hurts! It even hurts more if the price drops below $10. Exercise price $0....what is the stock option element in this? what a poor incentive, no matter what youll get something.
I reduced my position and sold 8400 shares last week at $13.85 after the Sydney Rollock resignation....Im just not quite so comfortable with the equity compensation plans/dilution.
If you are going to rob shareholders...at least do it with some class, don't let somebody leave with 5 years of stock grants for 1 year of work. Not only do the option not serve the purpose of employee retention, they don't serve the purpose of a real incentive as they all got exercise price equal to zero.
It's not an employee incentive program, an employee retention toll...it's a farce, it's a scheme!
Q3 2013 to Q2 2014...a sales decline?
Musclepharm's overall sales numbers haven't collapsed though....and little by little Muscle Milk, Met-Rx, Six Star powder and protein bars will be replaced by Arnold Iron products and MuscleTech, Optimum Nutrition anc Cellucor will be challenged and replaced by Musclepharm products.
Internationally, Musclepharm can grow too as it understands marketing and branding is important...investing money into UFC, surfing in Australia, Wrestling and multiple top athletes in America...plus Arnold, a Worldwide legend....and Tiger Woods, a legend to some in America and a legend in Asia.
I believe Ryan Deluca received some of the $100 million Liberty Media paid for it....Also, Im quite sure Ryan Deluca is paid a monthly salary at Bodybuilding.com. So, why should he need Musclepharm to pay his bills?
Musclepharm got nothing to do with banned substances sold through bodybuilding.com in the past...This has nothing to do with anything relevant to us...So, what about Mr John Malone of Liberty Media...is he also a criminal?
Better watch out for not being sued by Musclepharm or Brad Pyatt for Defamation....because that is what this is.
Monster Energy should sue Cytosport for infringing it's trademark.
Cytosport Monster Milk??? C'mon, you gotta be kidding!
Cytosport is trying to associate itself to a stronger brand than it's own Muscle Milk....Monster Energy definitely shouldn't let Cytosport get away with that, I hope they meet in court.
BTW, Ive noticed that Monster Energy and Musclepharm share the same Investors Relations company...I wonder how much of an advisory role such a company got to the management and to the board? It would surely be nice if Musclepharm turned into another Monster Energy one day.
Monster Energy's stock price grew 20,000% since the early 90ties...back then it was named Hansen Beverage Company. Only United Healthcare has had a similar run.
Instead of wasting too much money on huge endorsements, Musclepharm should follow the example of Redbull and invest in smaller endorsements....be it the surfer from Peru, the hip hop artist from Norway...whoever is considered cool in the local market.
The typical buyers of Musclepharm's products are the same as Redbull's buyers, they are young people into local subcultures.
The fact that Tiger Woods is known all over the World, that is hwhat gives value to Musclepharm...but sponsoring his golf bag, I doubt thatll boost sales of MP Combat Whey or MP Assault...Those watching golf aren't bying that much protein powder.
However, Coco Protein and other mass market protein products could be bought by the golf playing age group...unfortunately, Musclepharm hasn't launched most of these products yet nor does it have any mass market channels for these products as of today.
So, unless Musclepharm steps up its efforts with the mass market products....Tiger Woods will have zero value to it.
Tiger Woods is not worth the dilution for the shareholders...but let's see how Musclepharm will use his endorsement.
Tiger Woods seems to be most popular among Asians...so, it could be interesting to see what plans Musclepharm got in stock for that part of the World.
In America, Tiger Woods got some popularity...but Im sure many wouldn't buy anything he endorsed to be honest. He just doesn't seem like a very likeable person to me....
In Europe, fak Tiger...we don't need his crocodile tears..
Only comfort we got with Musclepharm is that so far it has delivered excellent sales growth...So, like in a marriage....it might be that your wife is a big spender, but as long as you make good money...it doesn't matter so much.
Musclepharm needs to think very carefully about what stock option plans it issues going forward...it is very important that employees got incentives to perform and to stay with the company for the long haul...Also, it is important to demonstrate to shareholders that equity compensation plans aren't excessively dilutive and that any dilution is serving the company a purpose.
Letting this chief of marketing with a MBA from University of Michigan, not Harvard Business School or Kellogg School of Management that excel in marketing...leave with all his unvested shares after only one year is a joke.
In a way we should address our concerns regarding equity compensation plans and dilution to the shareholder activists at Wynnefield Capital.
We know the top management is screwing us shareholders and we should not put up with it.
I guess the mess concerning Mr. Bluher and Mr Rollock resignations are hurting the shares of Musclepharm right now.
IMO, Musclepharm should quit granting stock options with exercise price equal to zero....and furthermore, Musclepharm should not let anybody that worked for less than 30 month have any unvested stock options vested.
It's like with alimony in a divorce....what you are entitled to depends on the duration of the marriage.
i guess the ladies know better than us what they want...many women nowdays got more balls than the men got..
thanx for the excellent research! nice to know that musclepharm that musclepharm got global ambitions
those plastic protein containers are not that feminine...but again, there are many types of women. There are those women that want lots of muscles and those women that just want a little bit.
AT GNC you got all types of women...those entirely looking for some pansy products and those looking for some potent hardcore products.
I have no objection to the choice of colors...I would put the fitmiss protein in a bag though
I think she is a good sales person...but I agree...it was kind of a joke suggesting her.
Definitely Musclepharm needs to pay more attention to the fitmiss brand...The brand look fine with me...but the packaging should look entirely feminine...That means more paper, more squares, more hearts..more sophisticated and delicate without going overboard.
Men want power, they want mass and pump...girls want to be firm.
CitiFx Pro is powered by Saxo Bank...so in a way, Saxo Bank found a way to the American market too. I guess Citi provides the liquidity for CitiFX and Saxo Bank provides all the back office.
This is the philosophy, Musclepharm should follow....even if the US home market is huge...UFC, Arnold and Tiger Woods got worldwide appeal...and so does good looking packaging and clever slogans.
There is nothing in the way for Musclepharm to replicate it's business globally....but it takes money and it takes some risk sharing and access from local partners.
Musclepharm as well as Saxo Bank still got better conditions for making money than many other businesses that face much tougher regulation.
Saxo Bank of course is a whole lot more complex business than Musclepharm, as it needs a whole legal department of it's own, having clients from all over the World...Still, apart from the US the barriers are lower for Saxo Bank in many key markets.
Musclepharm face lots of tariffs and duties in key markets, making it hard to enter...also, sports nutrition is offered in most markets already....so, nothing entirely novel is brought to be plate...apart from different branding.
yeah, I guess anybody with too much luggage is better outside Musclepharm than inside. Im not really sure the Deluca brothers are so bad.
In Denmark, we got Saxo Bank this Forex and Contract-For-Difference (CFD) broker that got tremendous success worldwide (ex. United States because trading in CFDs isn't allowed).
Saxo Bank had a very shady past in Denmark as a forex and options trader in the early 90ties...Still, this company turned into a multi billion dollar business, with the founders regularly at CNBC Europe and recently with one of the founders speaking a Fox News about the faillure of the US welfare state.
This is very typical, if you deal with some under regulated businesses...your reputation won't be perfect to begin with.
Sports nutrition in America like a decade ago, options trading and forex trading in early 90ies in Denmark....there were no rules..
Musclepharm needs to have it's products manufactured in China...and probably in Brazil too. Well, let's see who is gonna be the next president in Brazil after Sunday's election....but if nothing is changed, about everything imported will be hammered with high tariffs and duties in Brazil and in China as well.
China and Brazil sports nutrition markets are comparable to the US market...so, really...it's a no brainer than when Musclepharm gets more financial strength...it should seek to enter these markets more profoundly.
Musclepharm should hire Liz Gaspari to deal with the fitmiss brand...
The sports nutrition business is like the early days Las Vegas, whoever got the broadest shoulders win...we need the Deluca brothers and we need Liz Gaspari...
Yesterday, I visited a Costco at Sample Road, Broward county Florida ....and the Musclepharm Combat was the brand that got most space at this store. MP Combat was priced at $44.95...so full price.
At my local Costco, Cellucor is the brand with most space right now...but Cellucor sells with $10 off at $34.95
I visited a Walmart too....and it only had 4 containers of Arnold Iron Whey...and lots of this Six Star crap. Whether the Arnold Iron Whey was selling out or Walmart doesn't stock much of this product remains unanswered...for sure, Six Star is a competitor to Musclepharm at Walmart.
In a way, I would probably buy the Arnold Iron over the Six Star product though...I mean, something Arnold is involved in gotta work, right?
these fitmiss products' packaging is too masculine for women....No wonder this Colombiana bu.tt was paid to write this nonsense
Musclepharm got different competitors at different channels
At GNC and Costco the competitors are the traditional ones....only with MuscleTech missing at Costco...and Optimum Nutrition somehow muted at Costco considering it's leadership in the market.
At Walmart...andat Walgreens and CVS if Musclepharm enters these...you got MuscleTech's Six Star brand and EAS all over the place.
As Premier Protein is stuffed by Post Holdings at Costco....Im certain Dymatize brand could become a future threat to Musclepharm....unless Post Holdings cannot agree with Costco on the right price.
Post Holdings $380 million investment into Dymatize wasn't for nothing...Im quite sure we will hear more from that brand, explaining why Musclepharm so eagerly is trying to diversify in other product categories.
My personal advice to Musclepharm....step up the International sales efforts, visit China....figure out if you can get in over there without risking it all. Keep on with the broadening into other product categories but try to not go too far away from protein based products...that's where you got your forte...not in anything else.
Lol, I shouldn't have said that...
probably that explains why private equity firms make so much money....they don't give you your unvested stock options when you leave...public corporation tend to screw the shareholders big time....that is why I cannot wait to see this company acquired by some other company....actually, not just Musclepharm....but any company Im invested in.
one thing that strikes me is that nothing is mentioned about not sharing confidential information and not competing against Musclepharm. These things seem more important, unless Mr Rollock experienced discrimination or something like that.
I doubt he would get $800,000 out of any lawsuit against Musclepharm...but his inside knowledge of the company might be worth millions.
Musclepharm probably needs a better Human Resources department and make sure that stock options are not granted that generously every year...little by little...not $1 million worth of stock options granted to new employees like that.
I guess Im wrong.
The words of a real "expert"
My experience is that a great many “equity” plans provide for continued vesting so long as the employee is terminated without cause, and the employee does not compete directly or share confidential information. By “equity” I refer to stock, stock options and other securities of a company. Over the decades I have reviewed many, many employee participation equity plans, and have found many of them to provide for continued vesting of stock options where (a) the employee is terminated without cause, (b) the former employee does not go to work for a direct competitor, and (c) the former employee does not engage in any other misconduct, such as sharing or using the former employer’s confidential information.
fine, he will receive $112,500 and 15,000 shares on December 31, 2014. He really wasn't entitled to the 15,000 as he resigned prior to December 31, 2014...
No, they did not...it doesn't work like that. 60.000 of those stock options will remain unvested forever.
Sometimes companies will even take back vested stock options if you don't stay the full 5 years.
Stock options are for employee retention....Sydney Rollock most likely would have liked to stay to receive these stock options....but for whatever reason, he was forced to resign.
vested as scheduled, means they won't be vested on any other dates... Sydney leaves from the company's payroll on December 31 this year...So, he will be entitled to 15.000 shares...Had he stayed another year, he would have been entitled to another 15.000 shares.
Have you ever heard of Whole Foods Market?
Haven't you noticed that organic fruits and high-end supplements increasingly are sold through supermarkets and drugstores?
Musclepharm got no choice....it cannot grow enough by selling entirely through specialty retailers...none of it's competitors do that.
Just look at GNC, it had to get inside Rite Aid to succeed. Vitacost had to be part of Kroger to grow.
What is there to understand?
lately we have been treating highly positive or non important news for Musclepharm as bad news....That is a huge problem.
Examples:
A.
Musclepharm entering Walmart and Sam's Club turns out to be a big panic for everybody...Any sane person would agree that is great news given there ain't any larger retail partner in the entire World (that's right, Walmart is the greatest retail operation Worldwide).
B.
Sydney Rollock resigns the day before his 1 year anniversary at Musclepharm. Sydney and Musclepharm have done their utmost NOT to screw shareholders...yet, that is what is assumed by all.
Sydney leaves with 15.000 shares for one years work and he will be paid another 2 months of regular salary. He was head of Sales and Marketing....a quite demanding position..Sydney Rollock had the right experience for that position but apparently it didn't work out.
Big freaken' deal....he only worked for the company for 1 year...so, Musclepharm didn't evolve entirely around him. The guy most likely brought lots of positive things to the table...but the young dudes behind Musclepharm wanted more...Cool with me, I want more too!
even if priced at zero, I clearly overstated...according to SEC:
( 1) Granted to Reporting Person by Issuer pursuant to the Reporting Person's employment Agreement. Such shares shall vest in 15,000 share increments on December 31 of each year beginning on December 31, 2014 and ending on December 31, 2018.
So, we are talking about 15.000 shares...that's like $200.000...Really, Sydney used US and WE used Sydney!
what is happening right now is that smaller protein powder players are having a harder time as the industry is maturing....
Branding, scale, mass market retailing, promotion and quality are the key success factors of the industry these days.
if Sydney sells now he will probably make around 75.000 shares times $3-4 (=stock prise gain since May 2014)...so max $300.000 on his stock option award.
Usually, stock option awards are attached the market price price at the time they are handed to you....so, there is little to be worried about. Unvested stock option awards, theyll never come to play now.
he had the job for 1 year minus 1 day...I guess that had to do with his contract...he wasn't needed.
Hopefully, Musclepharm gets the right man for the position now...because marketing and sales is what it's all about.
on a personal level, it's sad...for the shareholders that is good news....when it ain't meant to be, it ain't meant to be!