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I use think the same thing about dnizzle6, and I too found he was legit. The spending has not killed the Company, but has killed many of the shareholders. I could use stronger words.
I sold part of my position, but I still believe MP is way too hot for this Company not to pop. It should do $40M next year and be valued at $60M. This will only happen if there is some external pressure to control spending. I really thought when they hired John B., that he would make a difference, but that has not been very evident to date.
Dilution is going to happen to meet the growth projections, but we do not need to add wasteful spending on top of the investments. Has Muscle Pharm ever stuck to a budget? They also better figure a way to communicate and appreciate their shareholders!
I agree that MSLP is way under valued! But I am still very disappointed in the lack of communication with shareholder, careless spending (not speaking to building the brand investment), and constant dilution of the stock at such low price levels. With this revenue growth, any showing of earnings would have this MSLP trading at 5 cents. The Company needs a stronger Board and and Investor Relations position on team.
Congrats Odessa! Good hits and nice story line. Hopefully, MSLP follows.
Codie,
What is your guess for the extremely high volume?
stupified777,
I think you said it best, better alternative methods are being sought. I think we will still see big dilution for expansion, but hopefully we can find a real partner vs these desperate one off deals.
On bad news, 22 mil shares are traded and the stock climbs 15.7%? Somebody knows something :)
Wow! Incredible volume! Something big needs to be happening to get that kind of volume. I don't see the dilution slowing down any time soon, so we need some big news.
Does Muscle Pharm get the revenues from apparel sales? I don't think so, I think it goes to MusclePharm Sportswear which is not owned by Muscle Pharm.
Very well said tarkless! Sorry, I did not read your post before making my own comments. You, Oldgrey, and others do a great job analyzing the Company!
gw323, we need to worry about more than the revenues. Revenue growth is awesome, and I too believe that they can hit $10M quarters in the near future. But Company success does not always translate to shareholder success.
The dilution is huge, and there is no end in site. And management has not communicated it's strategy or concerns with dilution going forward. Many people bought in above 5 cents and continue to average down. At some point they will not be able to average down any further. Revenue growth has been great but they are losing their shirt on stock price because of the dilution. And I believe the big dilution will not end anytime soon. And financing the Company through dilution at one cent is a killer for current shareholders.
Could the Company turn this around? Absolutely, but not with implementing a ridiculous bonus plan, etc. The current management team is doing a good job growing the Company, but has not cared about it's shareholders.
Interesting. I think that MusclePharm Sportswear and Muscle Pharm are two different companies. And I don't think Muscle Pharm owns MusclePharm Sportswear. If they did, it would need to be disclosed.
I will try to clarify. It seems to me that MP has been looking under every rock they can find for some money. I think they will eventually find a big investor to help with expansion and it will result in significant dilution to the shareholders.
I see the money for daily expenses being able to be paid by the revenue growth. But they do not have money in the bank to continue to expand the business.
Justlovethegame, MP needs to show earnings next year. Revenue growth will slow, that is a fact. And that is not a sign of weakness. The Company can not sustain a 350% revenue growth. The international expansion will help, but revenue growth will slow.
I agree dilution is significant when you are trading at a penny. That is why management needs to communicate with investors, slow spending, and cut out crap like the bonus plan. They are killing the current shareholders.
I think we will see even greater dilution next year. MP is a cool company, but not a great investment right now.
Odessa99, we are all speculating. However, you are naive to believe that a big flux of capital will not be needed to support the sales growth. I will save your comment and send it make to you in the coming months. I am right on this one!
Today's record revenue announcement should of been great news to us. It has little impact because the management won't answer our questions. Do they even have an investor relations person?
Earnings is still the name of the game. When a start-up like Muscle Pharm has good revenue growth, investors try to calculate future earning before taxes and depreciation. In the end MP will be valued at 10X or 12X earnings.
The rapid dilution, high spend, poor communication and lack of trust in ownership will continue to kill this stock.
Management needs to show earnings and a growth plan that minimizes dilution or the stock price will stay in the cellar. Let's face it, most of the dilution is NOT coming from planned expansion. It is just to meet daily expenses. The big dilution is yet to hit!
Okay, one last comment, then I will be quiet. First of all, it is not a crappy Company or crappy products. I can even praise some of the drunk sailor spending to build the aggressive brand awareness. But you can't kill your shareholders in the process. And right now, the management has killed many of those loyal to the stock.
I will ease out of the balk of my position. But I own around 15 million shares, and you can't just dump it in a week. Long term I think the Company will do great; I do not believe the investors will do good. You can model many scenarios and you can see where the management team will do fine, but this stock within 3 months will be diluted 2X the 750 authorized today. Do 10 times earnings and divide by the shares, and it is a tough road to get much price appreciation.
I think the revenue will continue to grow rapidly for a couple of years especially if the international expansion is successful. But those earnings will never catch up the dilution. A reverse split does help the dilution. The only reason you do a reverse is to try to qualify it for NASDAQ.
I don't bad mouth the stock to be a jerk. Sites like this have many real investors, who can rally to demand management to look after the owners/investors of the Company. Otherwise, there is not accountability or check and balance.
At a minimum, the management team could communicate it's strategy. Or even lay out a time line when it will be communicated. And zero response to many questions directed to the Company is a very poor practice. You don't have to answer all the questions, but you do need to respond to your shareholders. Which takes me back to my first comment, management has not showed much regard to us Long term investors in the Company. And trust me, I will hold them accountable.
GardenGnomes,
At least you got a response. That is progress.
I think you have missed the point on every message that you have responded to. A cheerleader won't help the stock now. Dilution is real, and lack of earnings is real!
Hi Shaumus,
I have written and called the Company several times and have not received a response. I was very polite in my communications. Why would the Company respond to you and not the rest of us investors? It does not make sense.
Many companies have a IR person that does a great job staying connect to the investors. We understand that they need to be careful with material information, but there has been frustration growing for over a month, and absolutely no response from management.
I like to invest in companies that I believe in, and in companies that care about their shareholders. I like the products but this management team could care less about their shareholders.
I will try not to hurt the stock, but I will unload my significant position over the next 10 weeks.
I would hold my position if the Management had enough respect for the shareholders to address our concerns. This should of happened over a month ago. I have a very large position that I will dump over the next 10 weeks. My three reasons for selling:
#1. Management seems to be addicted and irresponsible in spending money. The game is about earnings, and they are being disrespectful of shareholders investments.
#2. I see no end to the dilution. For every dollar I invest today it will be worth 50% in a couple of months due to dilution alone. And so far management has refused to communicate their strategy around funding the Company's growth through further dilution.
#3. I do not want to own stock in a Company where the management ignores all my messages and questions. I also believe some of their actions could result in costly legal action.
It is not about revenues, it is about EBITDA.
Do they not have an investor relations person? They need to explain their strategy around dilution. If not I am dumping my holdings which is significant. I don't want to get diluted to a point where I have no chance to recover. Ignoring shareholders is not cool!
Dakotaben, you are absolutely right. The stock is not going to increase in price without showing growth in Earnings. It is not wise to invest in a company with rapid dilution.
If the dilution makes sense, then why doesn't management articulate it's strategy? I thought they would have more discipline and better communication when Bluher was hired as COO. Disappointing!
Odessa99,
No question the management did a great job of growing the Brand and the revenues. But at a point in time, you need to mature, and not spend money that you do not have. You need to shift to being excited about growing the bottom line. I have not heard management ever talk about growing earning.
You also need to be loyal to your shareholder base and not dilute their investment. And paying with stock at this level is crazy.
I think you are right justlovethegame, maybe even get to 10 cents if John Bluher can help drive some earnings to the bottom line and slow the dilution. At this point in time the Company needs to cash-flow and grow the bottom line.
Thank you for your analysis!
I agree with your math and comments. But don't you worry about them not paying enough attention to the bottom line? We don't want them to be under capitalized, but we need to show strong earnings growth next year.
I guess many of us have made money in the market over time and feel like experts. I am a large investor and this is one of my favorite stocks. It is amazing that in such a short period of time MP has created such a huge buzz in this sector. The#2 Brand. Think about that! Sales growth is significant and I am sure there are many Companies that would love to acquire MP.
With all that said, I do not see a significant movement in the stock price until they can show a positive EBITDA. This should happen in 2012, and then you will not be able to touch this stock for under $.10
This stock is a slam dunk. I will buy all I can at these levels.
By the way I attended the supplement convention in Las Vegas a few months ago. There were hundreds of Companies there (almost everybody), and there was a huge buzz around MP and their products. That is why I decided to take a nice position and continue to buy more on a weekly basis.
It is all about EBITDA now! The marketing deals and endorsements are nothing more than advertising investments to increase the brand name. MSLP have done an awesome job branding the Company, but short term it hurts are earnings and dilution.
It is clear a couple of the posters on this board work for competitors. They constantly attack the products and management. It is too bad they are not smart enough to cheer for their market sector. Likely some bad blood when they were not hired by MusclePharm, or a lot of jealousy.
As soon as MusclePharm improves the bottom line this stock is going to soar. Sales growth is incredible and line of products keeps growing (good innovation).
MSLP has awesome products! Not we need some of the rapid revenue growth to fall to the bottom line. If this happens, the stock will take-off!
The Company has done a great job on Branding and now needs to improve the bottom line for the stock to go up.
You mentioned new lines of sports clothing. Any high end polo shirts or nice sweat pants?
Codie,
Everybody is entitled to their opinion, but I think you have the wrong read on this Company. I am a large investor, and this one will do quite well for me.
I know you have an ax to grind on this stock, not sure why, because we will do very well on this stock. In two years this will be trading on NASDAQ at a nice multiple. Let's see where this is trading one year from now. All the right players are coming into the Company and it is gaining huge momentum. And I love buying a stock, when I use and love the product!
My magic ball:
I think we will see $20 million this year, $40M in 2012, and $60M in 2013. The table is clearly set. They need to control spending on endorsements, broaden customer base, and invest more in new products. MSLP is going to worth over 100M market cap by the end of 2013, which is pretty awesome!
Hi Ryan, actually you did say it was over valued. See your post below:
Re: jwblue74 Post# 10063
It funny that you mention acquire another company, because I dont see MP being a buyout target, as its way to overvalued, but I do see MP taking over another company.
That is this Bluhners guys expertise and I truly beleive thats why they brought him along.
I hear rumours Under Armour wants to buy MP, but that to me does not make any sense. At least now now.
However maybe MP buys out one of the big nutrition companys. That makes a lot more sense to me.
Replies:
It could be a possibility.
jwblue74 on 10/10/2011 11:39:32 AM
Ryan, I agree with you on the dilution,
Bulldog2 on 10/10/2011 10:44:13 PM
We are fortunate getting Jeremy and John. Awesome job Brad!
Ryan, I agree with you on the dilution, but to say MSLP is over valued is crazy. This is the fastest growing brand in the industry and it would not of been done without tremendous marketing.
You are partly right. No exclusivity meaning that they are not the sole sponsor. There are a couple other companies with sponsorships. MSLP would not be knocked out, they have a multiple year deal. This may turn out to be a great investment. Time will tell.
I do not see the the UFC announcement as a big deal. I think it is just an advertising contract. Don't know the investment cost but this is hopefully better than signing Vic. I do not get their sponsorship strategy at all. Where do these see their market? Fighters? They need expand their scope to mainstream athletes.
For the stock to move, there needs to be a movement of earnings. Nothing else will move this stock. So what is the ROI on the UFC deal? What is the ROI on the Vic deal?
I want to see increase earnings without continued dilution!
MusclePharm stock is not going to be on a steady climb until they can show a positive movement in EBITDA.