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I'm afraid my friend, that it will take more than one quarter for DKAM to prove the new model works and for the stock to "shoot up to the moon". There were so many unfulfilled promises, so much false information in the past that one strong quarter won't do it. Just look at recent jumps the stock had. Every time after jump it went even lower than where it was before. Why? Because there are so many sellers (born by dilution) around waiting for any uptick to sell.
I thought about this the other day looking at our last financials. Indeed there is not much room for DKAM to jump this year. New model appears to be working (though I need to see numbers, not shareholders letter first), but it will take couple quarters until they adjust and increase sales. Meanwhile company needs to get rid of the debt that keeps generating enormous interest expense and the only way to do it - equity. Evidence: "We will need additional financing which may take the form of equity or debt and we will seek to convert liabilities into equity."- 10Q. In spite of lowering certain liabilities from prior quarter overall debt went up $117,561 from last quarter mainly because of the accrued expenses that still must be paid. All this leads me to believe dilution will not stop at least till the end of the year leaving no room for SP to go up considerably. Barring some ultra successful launch of RGB the stock will hover in the .01 -.02 range. All IMO.
Since I didn't get much help I decided to help myself. Here is interesting info explaining new short selling rules:
Q: What’s new about what the SEC approved Wednesday? A: There are a couple new elements to the rules. One element is essentially an updated version of the uptick rule. The second is a new “circuit breaker” component.
Q: Whoa, I’m already lost. What’s the uptick rule, again? A: This was a rule — created during the Great Depression — that said traders could only sell a stock short after it rises, i.e. an uptick. The rule was abolished in July 2007. But as the markets tumbled in 2008, there was a general clamor to bring back the uptick rule. The SEC wrote up some proposed rules, asked for comments about it and after reviewing them voted on the new rules today.
Q: Ok, so what’s different about the new uptick rule versus the old uptick rule. A: Under the old rule, you could short sell at a price above the last trade price, or after the last price was higher than the previous price. Under the new rule, you wouldn’t be able short unless someone was willing to buy it for more than the national best bid. (That is, for a higher price than anyone is currently offering to pay.)
Q: It seems like it’d be hard to find someone willing to pay more for a stock than they have to. A: It probably would be. That’s the idea. This is supposed to be a curb on shorting.
Q: What’s the advantage of using the best bid versus the last uptick? A: The SEC says “among other reasons, we believe that bids generally are a more accurate reflection of current prices for a security than last sale prices due to delays that can occur in the reporting of last sale price information and the manner in which last sale price information is published to the markets.”
Q: Ok, got it. Can’t short unless you can get someone to pay more than the current best bid for the stock. A: That’s only part of it. The second part is “circuit breaker” element.
Q: Oh yeah. What’s that? A: That part of the rule says that the shorting curbs come in when a stock’s price falls 10% from the previous day’s close.
Q: For how long? A: For the entire day in which the shares fell below 10 percent and for the following day.
Q: How many stocks is this going to effect? A: The rule will apply to stocks that are listed on exchanges and traded over the counter. The SEC estimates that about 1.3% of stocks would hit that 10% barrier on any given day, according to Dow Jones. Of course that would likely go up during times of major market stress and volatility, such as the kind we’ve seen over the last couple years.
Q: Wow. It’s certainly refreshing to have such a concise and pithy explanation of such as dry topic. A tip of the cap to you, good sir. A: No worries, we aim to please.
The rule will become effective 60 days after the date of publication of the release in the Federal Register, and then market participants will have six months to comply with the requirements.
That's a good question. I would have loved to see his 1040 :)
Maybe not all of his compensation is in the form of stock, otherwise we would have seen Form-4 every other week. But really, how is he paying for his groceries? They do not accept DKAM or any other shares.
On March 2, 2010, we issued 6,000,000 shares to our Chief Executive Officer and President; 5,000,000 (aggregate value $100,000) was a partial payment against the working capital loan he has provided to the Company and 1,000,000 (aggregate value $20,000) was awarded by the Board of Directors as a stock bonus for his accomplishments in the creation and launch of one of our premier brands.
BTW, this also explains the origins of these 5M that some thought were buys. It's only return of loan...
I would love him to buy any shares for money, but this is not the case. PK simply is taking compensation and... bonuses (!) in the form of shares. Although it's nice to see CEO has faith in his company I'd rather him buy 500K on the open market then issue himself 5M from unlimited supply of shares.
Sports and beer have always gone hand-in-hand, but watching the Detroit Red Wings while drinking Kid Rock's lager is a match made in heaven. It is the premier beer from the musician's new company, American BadAss Beer Company and it's pretty damn good. It is light enough to be a good game beer with more flavor than you'll get from any of the macrobrews. Bob Ritchie you've done well.
Now if we only finally found out where DA and KR stand on this project!
If they execute the plan properly (assuming they have a plan) Rheingold could be really big for DA as it holds all the rights. No waiting for a celebrity to confirm and approve this or that. Hope the launch is coming soon.
First of all PK did not report anything spectacular in his shareholder letter. It was positive, but not something to blow people off. Had he reported something like: We shipped 10,000 cases with another 10,000 shipping this week and we received $100,000 fee income from Mexcor for the first 10,000 cases - the stock would definitely attract some long term buyers and would probably hold .02. Still, he's on the right track as this is first quarter under completely new business model and they're doing good. Not spectacular, but solid. Sell off is the direct result of flippers who wanted to make quick buck on "CEO buy" news. Some who bought in .015 sold at 0.02. Who bought at 0.02 now selling at a loss as their sole intention was to hold 1-2 days.
I thought this S-8 was about rights offering and got excited. Because if that undertaking went well and DA collected at least $10-15M dilution would stop instantly. Looks like this S-8 is what was already mentioned in previous 10Q.
I saw numerous penny stocks with 1B or more in the O/S and PPS from .05 to .10. And most of the time they run on pure speculation. DKAM has pipeline of products that, unfortunately, they were unable to deliver upon. Imagine if they break even soon with this JV and even with O/S 400-500M PPS could easily top .15
Because PK sees the end at the end of a tunnel. Mexcor-Drinks sales are going to only go up from this quarter. As far as dilution concerns, it's easy: PK needs to pay bills now, not tomorrow. You saw this accrued interest in the financials? This needs to be paid off. Debt must be paid off. Of course he's doing it at present shareholders' cost, but it's not like he has much choice. After he reduces/eliminates debt and increasing JV fee income will flow into company I strongly believe dilution will stop.
"So at a 300,000 run rate on cost per qtr we need to move 30,000 cases a qtr through mexcor..."
Yep. 20,000 cases per quarter could be attainable with Olifant only once liqueur stores realize its power! So we could hit 30,000 cases per quarter this year.
LOL it's more like $10-$12 per case! Damiana is $10 per case.
BUT, keep in mind, it's "free money" - no COGS! so lets say 9300 * $10 = $93,000. That is equivalent of $344,444 (on 27% gross profit) in gross sales before new model. And this is only the beginning. I expect one or two quarters from now at least twice as high volume: 20,000-30,000 cases.
"The production and inventory build that the agreement is supporting has enabled us to produce and ship close to 10,000 cases since we announced the agreement.
Currently, 5,000 cases of Olifant are being produced in Holland against sales orders in hand, approximately 1,600 cases of Old Whiskey River have sold and are shipping this week and an additional 1,500 cases of Damiana have been shipped. Mexcor has already generated orders for these cases. There is also a container of Trump Vodka, approximately 1200 cases leaving Holland this week."
enabled to produce and ship.... hmmm I don't understand have they shipped 10,000 cases and now additional 1600 + 1500 were shipped with another 1600 shipping this week or all these orders are part of 10,000 enabled to ship?? Man I'm so confused.
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