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Today we saw day trader's attempt to push the stock back over $3 a share. They ran into overhead supply from sellers just below that level. We're not sure that those same day traders have the buying power to support the price at these levels, much less at a valuation of $156 million.
It's not the short-term pullback that is cause for concern.
We've seen this happen so many times before.
Investors get sucked into a story, surrounded by the hype, not paying attention to those who try to point out the warning signs to them.
They fail to understanding that the hype will only last for awhile, and like a hot air balloon, once the hot air comes out of the balloon it must ultimately come back down to earth.
What a shame so may investors got snookered by the hype.
https://twitter.com/AltitradePartne/status/611706757501554688/photo/1
Life Time Fitness Has 114 Locations Nationwide.
http://finance.yahoo.com/news/celsius-r-expands-distribution-life-130000382.html
http://investor.lifetimefitness.com/phoenix.zhtml?c=136737&p=irol-homeprofile
$CELH investors seem to have embraced a new tradition of communicating inaccurate information.
https://twitter.com/cleanmoney/status/613112746293481472
If he was aware of what he was doing and saying in those media interviews, and had a complete and thorough understanding of his misrepresentations, then he is in even bigger trouble that we thought.
His various faux-pas' could be construed as having foot-in-mouth disease. That is a liability.
While he may be savvy when it comes to hip-hop music and Def-jam recording contracts, he is a babe-in-the-woods when it comes to nutritional supplements and the regulations surrounding them.
All of his past accomplishments are wonderful, and we applaud his success. That said, we rely on the pragmatic stuff like valuations, balance sheets, revenues, etc. to make investments decisions, NOT HYPE.
We're glad that his presence at Celsius Holdings, Inc. gives you encouragement. GLTY.
There's a big difference between talking about Celsius Energy as a product and talking about the stock.
While Mr. Simmons would not be prohibited from discussing the company's product during the quiet period, he is bound by SEC rules when it comes to any mention of the stock when it is so close to the end of the quarter.
The problem, as we see it, is twofold:
1. He spoke about the company's products with total disregard for the NAD's guidelines
2. His comment that the stock "is on fire" sounds like a pitch for investors to purchase shares.
The former shows his lack of knowledge about the benefits of Celsius, the latter sounds like he is touting the stock.
We hope that this clarifies things for you.
Do you really feel the need to regurgitate Mr. Simmons resume for this board? People can easily find out his background information by doing a simple Google search. Your post seemed off-topic to us. That's why we removed it. Your other posts were removed because they violated I-HUB's Terms of Service (TOS).
You seemed to have missed our point entirely.
Whether he has been successful in past business ventures is irrelevant. He has only been a Celsius insider for a few months, and he is already in way over his head.
Don't worry though, the regulators will sort it all out, and decide what needs to be done, if anything.
No one said that Mr. Simmons should be "quiet about Celsius Energy", just accurate in his portrayal of the benefits of the product.
http://greeneyedguide.com/2015/05/16/energy-drink-of-the-month-may-2015celsius/
The SEC considers Russell Simmons an insider.
As such, he is bound by the SEC regulations regarding insider activity.
"A director or senior officer of a company, as well as any person or entity that beneficially owns more than 10% of a company's voting shares."
http://www.investopedia.com/terms/i/insider.asp
Could there be another problem facing $CELH?
When we first watched the video of the FOX News segment with Stuart Varney, we didn't watch it all the way through until the end. Once Mr. Simmons started talking about Barack Obama going down in history as one of this country's greatest Presidents, we just couldn't stomach it anymore.
What we missed by tuning out early was Mr. Simmons assertion that Celsius "(the) stock is on fire" It almost sounded like a plug to buy the shares.
Our question is should a corporate insider be talking about the stock of a publicly-traded company with only two weeks left until the end of the quarter? Mr. Simmons is probably not aware of what is known as the SEC "quiet period" as it relates to quarterly earnings.
If, however, he intends to become one of the company's Board of Directors someone should educate him about the rules and regulations imposed on those individuals having such a high-level of fiduciary responsibility.
http://www.foxbusiness.com/business-leaders/2015/06/17/russell-simmons-rather-kim-kardashian-be-president-than-donald-trump/
Pursuant to your request, we have brought the matter before the appropriate regulatory agency.
Intention to deceive is irrelevant. Ignorance is not a defense. Mr. Simmons has a fiduciary responsibility to shareholders. If he is going to make statements in the public domain about a publicly-traded company, he has an obligation to know what he is talking about and communicate the product's message clearly according to the NAD rules and guidelines.
Initially, we were excited about the prospect of Mr. Simmons getting involved with Celsius, but now we view him as a liability, not an asset.
He is the quintessential self-promoter, and that is fine. He just needs to understand that there are members of the public who are more than likely purchasing shares of CELH based on erroneous information that his is disseminating publicly.
If there is regulatory fallout from this, and the company gets slapped with a meaningful fine, the stock will probably take a hit. Any shareholders who made an investment based on Mr. Simmons public statements, and lost money, would probably have some legal recourse for their losses.
Therefore, you may possibly want to rethink your position of hoping that regulators get stirred up about this.
Should Regulators Be Watching This?
http://altitradepartners.blogspot.com/2015/06/june-19th-research-notes-trade-blog.html
$CELH and The Russell Simmon's Rally
http://altitradepartners.blogspot.com/2015/06/june-18th-research-notes-trade-blog.html
American Bulls website produces $CELH buy signal today
"Our system’s recommendation today is to BUY. The BULLISH HARAMI CROSS pattern finally received a confirmation because the prices crossed above the confirmation level which was at 2.1750, and our valid average buying price stands now at 2.1850."
https://www.americanbulls.com/SignalPage.aspx?lang=en&Ticker=CELH
Kbaz, in answer to your question.....
You, like many others, seem to think that sales are going to just magically increase because of this new investor group. It's not that simple. It will take at least 6 months to get everything in place in order for that to happen. Our revenue estimates for FY 2015 reflect the company's potential after the capital infusion by the new investor group.
There are a tremendous amount of front-end costs associated with this new strategic plan, such as marketing and advertising, promotional collateral, displays, endorsement deals, etc.
Some of those endorsement deals will likely be in the form of stock options, but that too will have to be expensed in coming quarters.
The up-front manufacturing costs will likely be substantial to enter new markets along with import taxes, tariffs, and licensing fees. You can't just show up in China and start selling your products. There are regulations and guidelines for packaging. There are things that you can and can't do in your product packaging design and say in your branding message.
We're not even sure that these guys have a consistent branding message anymore. They've flip-flopped so many times, we're getting dizzy.
Once they manufacture the product it will need to sell. The old management team followed the "Field of Dreams" plan --- "If you build it, they will come". We're hoping the current management team doesn't go down that same road. We doubt they will, but they've got a lot of work ahead of them.
We would give this another two quarters before we should begin to see a major impact to the top line. In the meantime, those expenses we mentioned will likely impact profitability in the near term.
The track record of Russell Simmons with Skinny Water also gives us reason for pause. The fact that the company filed for bankruptcy is not a confidence builder for us.
We still think that the valuation for CELH is too high. They may wind up growing into that valuation, over time, but in the meanwhile we feel that we can deploy our capital better in other investment ideas.
GLTY.
BTW, we should point out that the company only received $11.5 million of the $15.9 million in gross proceeds.
Therefore, the actual capital investment is approximately one-half of your $20 million number.
"There was an additional investment along with the $15.9 that increases the capital to close to $20myn."
Really, we must have missed that .... NOT.
Everything still only adds up to $15.9 million, not $20 million.
"In connection with the investment, Celsius privately sold 12,921,348 shares of its common stock to the investor group for $0.89 or a total of $11.5 million and certain members of the investor group acquired an additional 5,000,000 shares by purchasing an outstanding $1.5 million convertible note held by CDS Financial, Inc. (“CDS Financial”), an affiliate of Celsius’ principal beneficial shareholder, Carl DeSantis and immediately converting the note into the additional shares."
http://www.otcmarkets.com/financialReportViewer?symbol=CELH&id=136239
Okay, we'll take our response in steps:
1."This group does not have the mindset if you build it they will come".
We didn't say that they did. We said that old management team had that mindset. New management team is smarter than that. We said as much.
2."The manufacturing costs you speak of are actually going to be cut as ramped up larger batch sizes will decrease manufacturing costs".
Saying that they will be producing larger batch sizes, in and of itself, means substantially higher production costs. Glad that you agree with us on this one. Freight costs and import taxes will also likely cut into margins. What do you know about the import tax in Brazil? We suggest you do some investigating. You may be very surprised.
3."True, Raw ingredient costs will likely be incurred up front, but most suppliers have decent terms with a show of strength in balance sheet".
Raw ingredient costs have been going up according to conversations that we have had with management.
4."Not to mention a couple phone calls from the new high powered partners".
Yes, let's not mention that because a phone call from them means absolutely nothing.
5."I think it is evident that Rush, Li Ka-Shing, along with the rest of the group would in no way tolerate a $6myn revenue growth year over year on an almost $20 myn capital investment."
Your numbers are incorrect. The investment group put in $15.9 million not $20 million. FY 2014 revenues were $14.6 million. Getting to between $22-25 million in FY 2015 is a YOY increase of 51% on the low end and 71% on the high end.
If we use a $25 million revenue number for 2015, that is a $10.4 million revenue increase YOY. Not a bad return on a $15.9 capital investment.
In addition, they've got a lot of ground to make up since Q1 2015 revenues only increased by a disappointing 20% over the same quarter in 2014 and only 1.3% sequentially from Q4 2014.
During the last two fiscal years the CAGR for revenues came in at 38% in 2013 and the same 38% in 2014. To double that number would be very commendable.
The bottom line is that we think your are being way too optimistic.
Technical picture has turned decidedly negative for $CELH
On the daily chart, the stock has broken its 50-day moving average at $2.29 on heavy volume.
http://stockcharts.com/c-sc/sc?s=CELH&p=D&yr=1&mn=0&dy=0&i=p73255301862&r=1434043928059
Looking at a weekly chart, the MACD is rolling over and approaching a negative crossover.
http://stockcharts.com/c-sc/sc?s=CELH&p=W&yr=1&mn=0&dy=0&i=p25596394485&r=1434044068962
We are looking for the stock to continue its trend lower and approach the price at which it becomes more fairly valued. A price of around $1.75 would seem to be a possibility.
http://altitradepartners.blogspot.com/2015/05/may-20th-research-notes-trade-blog.html
An Update to Our $CELH Blog
http://altitradepartners.blogspot.com/2015/06/june-8th-research-trade-blog.html
Two stock promoters heavily tweeting $CELH
https://twitter.com/search?q=%24CELH&src=typd&vertical=default&f=tweets
Our latest blog on $CELH
http://altitradepartners.blogspot.com/2015/06/how-when-will-celsius-brand.html
$CELH Short Interest Up Another 453%
http://shortsqueeze.com/?symbol=CELH&submit=Short+Quote%99
Arriving at a Fair Valuation For $CELH
http://tinyurl.com/kdh5rza
Our T/A interpretation for the chart of $CELH
http://tinyurl.com/n3l6dvd
MSLP Management Continues to Have Credibility Problems
The fact that management continues to play coy and is unwilling to disclose material information to shareholders is troubling to say the least.
When you are left with the feeling that you cannot trust what you are being told (or, in this case, not being told) it makes for a very uncomfortable feeling as a shareholder.
http://seekingalpha.com/article/3186626-musclepharm-q1-2015-backlog-might-have-had-a-different-reason
We wouldn't touch this stock with a 10-ft. pole.
Check out the $CELH reviews on Amazon.com
Sixty-eight percent (68%) of users give Celsius a perfect *****FIVE-STAR***** rating.
http://www.amazon.com/Celsius-Raspberry-Acai-Green-12-Ounce/product-reviews/B007R8XGKY/ref=cm_cr_pr_viewopt_srt?ie=UTF8&showViewpoints=1&sortBy=recent&reviewerType=all_reviews&formatType=all_formats&filterByStar=all_stars&pageNumber=1
The first step in growing revenues is getting consumers to embrace your product.
http://altitradepartners.blogspot.com/2015/03/march-25th-research-notes-trade-blog.html
More Media Buzz Coming For $CELH ?
Here are two must see videos.
$CELH CC Now Available on Our Blog Page
http://altitradepartners.blogspot.com/2015/05/may-15th-research-notes-trade-blog.html
Just in case you are not registered with Seeking Alpha and cannot gain access to it on their web site.
Short Interest in $CELH is up over 800%
http://shortsqueeze.com/?symbol=CELH&submit=Short+Quote%99
http://www.otcmarkets.com/stock/CELH/short-sales
Conference Call Transcript on Seeking Alpha
http://seekingalpha.com/article/3182586-celsius-holdings-inc-q1-2015-conference-call-transcript-second-consecutive-quarter-of-profitability-on-record-revenues
Our latest blog on $CELH
http://altitradepartners.blogspot.com/2015/05/celsius-holdings-inc_12.html
$CELH Q1 Conference Call Replay
http://celsius.com/celsius-holdings-inc-investor-call-may-11-2015/
Bloomberg Article on Impact of Billionaire Investors
https://twitter.com/AltitradePartne/status/597837810716921856