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Costco is a perfect channel for Musclepharm's energy drinks.
Some of those that buy the product will know Musclepharm in advance, many won't and that's perfect for Musclepharm....it increases brand awareness.
Would it replace RedBull or Monster? probably not, but it would help the bottom line at Musclepharm for sure...and it would separate Musclepharm from other sports nutrition companies that entered the space but never made the products widely available.
Right now, it's the protein bars and protein powders that are contributing the most to Musclepharm's bottom line in all honesty.... so, we will have to wait and see what Musclepharm gonna do with the energy drink category as we move into this quarter.
it doesn't matter....what it comes down to is that Costco wants to sell something that is high quality and different.
Musclepharm Energy Sport Zero and many other Musclepharm products fit that category very well....so, I'm convinced Musclepharm has a bright future ahead of it at Costco, and potentially sell 10 different products there.
not entirely correct, it's Costco itself and it's these companies I just mentioned that manufacture these products. The big food companies typically manufacture private label products for Walmart, not for Costco and Whole Foods Market.... Recently, ConAgra bought Ralcorp though....but that might hurt it when it comes to Costco...I'm quite sure Costco wants to give these big companies the least power possible.
Anyways, Musclepharm is a small brand and not a private label brand, but these kind of smaller brands do well the same places the private label brands do well.
When it comes to shopping in general, Americans are increasingly looking for new products....not just at Costco, but at Bodybuilding.com as well....and it gives Musclepharm many opportunities, but challenges as well.
Really!?
so Kirkland, Ralcorp, Treehouse Foods and not the least Perrigo Pharmaceuticals products are all name brands?
I looked up Ralcorp and the two largest customers are Costco and Trader's Joe...LOL, pretty much supporting what I was telling you about Costco and Whole Foods Market....that these provide excellent opportunities for Musclepharm
Really, if I were Musclepharm I would start making many other products for Costco and Whole Foods Market as well...
low margin energy drink market?
What's low margin about energy drinks? RedBull costs as much as Coca Cola to produce, yet the price is 10 times as high.
People that shop at Costco don't go after the established brands, they go after niche brands and private label brands....everybody knows that.
Same universe in Whole Foods Market....people go for something different.
Musclepharm should trade at p/s=1 at all times....just my 5 cents.
Look at Castle Brands, the market cap is $230 million and the company only sells for $50 million a year and doesn't make money. On paper Castle Brand is worth more because the stock trades higher....in reality it is not worth much more than it's cash position as it doesn't have any market for it's products.
Musclepharm does need some product management to maintain it's sales of existing products as it expands with new ones...but all in all, it has expanded sales every year it has been in business.
Musclepharm's products stand out and have gathered quite some following of loyal customers. The competition is a little dirty lately with Jim Stoppani and BPI Sports insinuating other products are not as good as their products....but I think that is a temporary problem and that down the road these will disappear as they have made themselves target for scrutiny and attacks by attacking others.
because people are always looking for something new.
Many of the competing protein powder companies got their own energy drinks, but the packaging is too "protein powder company" like....and will never make it big outside sports nutrition retailers.
The Musclepharm Energy Sport separates itself from that crowd, I truly believe the product would sell well at Costco....and the margins would be wonderful.
There is nothing wrong with the packaging of the Energy Sport Zero imo....When you do your grocery shopping at Costco, you always bring home some new product. At Costco you don't worry so much about the cost because Costco makes you believe you get a good deal, and you are free to return products you don't like for a full refund...
Musclepharm is some odd long brand name similar to Under Armour...that makes people buy the product in itself out of curiosity.
Musclepharm is on to something here...
Musclepharm should enter the World of rugby as it's big in Commonwealth countries....and got it's following in America as well.
http://usarugby.org/
The energy drinks may very well be the ones that contribute the most to the bottom line if Musclepharm enters a distribution agreement with Costco that would spread the product throughout the country from one day to another.
My feeling is that these energy sport drinks are gonna sell very well.
adamsapples, removing uncertainty usually makes a stock price go up....Closure to the SEC investigation with charges to some resigned executives.....how should that hurt shareholders?
From one day to another, Musclepharm becomes eligible for corporate bond financing and other investment bank products. Until this day, Musclepharm had to go to the local savingsbank to get a strawberry lollipop and a secured bank loan.
The stock price doesn't make any sense as Musclepharm is settling the case with the SEC.
Musclepharm is suppose to announce decent revenues for Q1 and Musclepharm hasn't raised any capital yet.....so, it's hard to understand why investors are not buying the stock?
It's a very small niche and a loser imo. Let Glanbia, Coca Cola and Pepsico lose money on investments into these laggard coconut water products, and start figuring out how to make money on the energy drinks and the protein bars.
Musclepharm just needs to look at what the large beverage, snack and chocolate companies do and do the same thing.
For the mass market it needs a protein bar variety pack, where it mixes different flavors of protein bars ...and it needs to introduce 4 and 6 packs of the energy sport cans.
Also, Musclepharm should consider to make a deal with LAN Airlines for launching it's beverages and/or protein bars on LAN and TAM flights at very competitive prices....and to have it's products available at airports in Brazil...
If some Barazilian eats a mini protein bar on a flight, and it tastes good...imagine how much money you can make on him down the road....hundreds of dollars.
the 20% will be at a discount to the 80%.....it's a carrot from HIG's side...
Jimmy, the stock warrants may be worth something without buying the entire company....as they provide a guarantee that no buyer of Capstone Nutrition gonna screw with Musclepharm's manufacturing.
A buyer of Musclepharm might appreciate partial ownership in Capstone Nutrition as well, given that most of the manufacturing of Musclepharm products gonna take place there.
It looks like a carrot from HIG Capital though....it does look like they are serious about a deal.
The final price, the final date may change though...might be that Musclepharm ends up buying Capstone Nutrition in 2018 for $155 million and not according to this agreement....time will tell.
LOL $0.01 is a disguise....you are not informed how many stock warrants there are.
If there are 2,000,000,000 stock warrants, that would give Musclepharm right to buy the entire company for $180 million.
The price right now is probably that sky high....so, $160 million or lower is probably much more realistic final price.
Warrants give Musclepharm right to buy 20% of Capstone Nutrition for a set price guaranteed by HIG Capital. what if the set price corresponds to market cap $200 million? pretty much these warrants will be worthless if company is not worth $200 million...or fairly priced if Capstone is worth the $200 million.
Could be that Musclepharm received some warrants worth something, that correspond to a market cap of $100 million and Capstone Nutrition is worth more....meaning that Musclepharm can buy 20% of company for $20 million.
Probably this is what we got....HIG Capital trying with a carrot to get a deal.
HIG needs a little more than a carrot, it needs a peeler to cut down the price to where it should be, and then strike a deal with Musclepharm. Without Musclepharm, Capstone Nutrition may not be worth so much.
We are not talking about minority interest in subsidiary?
Musclepharm is going to buy the entire company or nothing at all...that comes down to negotiations between HIG Capital and Musclepharm.
Musclepharm needs to evaluate independently what is the value of Capstone Nutrition, and whether it would be worth internalizing manufacturing with these assets.
lol, you don't get 20% of profits by owning 20% of a company....what make you believe that?
Musclepharm is not gonna buy it for $200 million, mark my words.
HIG Capital is similar to Bain Capital....HIG buys one or two companies in a sector for like $70 million, provides some funding and cleans up balance sheet, combine assets if necessary and sells again for a profit...like $220 million.
These assets are just not that attractive again....and the buyer, Musclepharm is complicated....so, I assume that both parties see some benefits of cooperation and that HIG Capital really is the one that is eager to flip this asset, and arrange financing of it.
Externally, nobody is gonna finance this deal without some cut...my guess is that the cut will be whatever the other currencies lost versus US dollar over the last 12 months, like 25-30% off.
HIG Capital will still make a little money...but not the typical 80% to 100% it makes on lots of deals.
The timing was horrible for the investment, and the assets are better in Musclepharm's hands.
HIG Capital gonna try to squeeze every penny out of Musclepharm....but I think a deal is possible.
HIG Capital created Capstone Nutrition as well...and it is very clear to me that HIG Capital is very eager to sell it to Musclepharm.
The $200 million is probably more like a listing price, and not the final price by any means. The warrants in themselves have no value to Musclepharm as Musclepharm would have to buy the entire company or nothing.
My guess is that if a deal is made it would be btw $130 million to $150 million as maximum purchase price of Capstone Nutrition.
HIG capital needs to dump Capstone Nutrition....so, let's see how much Musclepharm should for pay at the end of the day....it could be down to $140 million or less.
Musclepharm won't finance an acquisition of Capstone Nutrition through equity, it will be debt financed with HIG Capital becoming Musclepharm's creditor.
stock count may go down or not increase much as $4 million debt is covered by stocks in escrow at current stock price
The stocks in escrow make Musclepharm appear to have $12 million in debt, when it only got $8 million with current market cap and stock price.....$4 million are covered by stocks in escrow.
So, the financial situation is not entirely as bad as it looks....still, Musclepharm needs to focus on the most important things now....and that is selling well.
UFC, Arnold Schwarzenegger, Colin Kaepernick...let's face it, these are important to the brand.
Assault needs a second version...somehow the market is demanding a change...
Combat Protein, it's a good classic....but Musclepharm needs to maintain the brand's integrity.
Combat Crunch....get that mutterfaker out there in all convenience stores.
Musclepharm needs adjustments, but it shouldn't introduce too many new lines as that could confuse consumers.
Musclepharm's success came from a few good products....same thing with Coca Cola's success as well as Jym Nutrition's success....a few good products is all you need.
my guess is we get past $6 with the closure of SEC investigation.....where we go from there depends on Musclepharm's profitability, that again depends on revenues and cost savings.
Young people dig a Tiger Woods in the gym....actually, it would increase the value of the TW brand in itself.
Lets face it, you don't need to be 18 years old to be cool with the young generations...I mean, lots of guys and gals in their 30ties, 40ties, 50ties are all into working out...
I mean, this Jim Stoppani acts like father figure and professor to the young generation, in his late 40ties with tattoos all over his body, down with the bros.
Tiger Woods needs to be more down with the bros, more down to earth....showing that he is a guy that loves going to the gym. He is a professional athlete and him giving example to young people and older generations could make Musclepharm penetrate all age groups successfully.
If we at least could get some video or just one picture, showing Tiger Woods working out in the gym consuming Musclepharm's products....
Endorsers should be forced to show they use the products, or just not represent the company. I don't care if it is saw dust and not real protein powder....just make people believe you consume this bullshit protein you are endorsing.
A picture of the athlete in action....that's all? I mean, is this a baseball card collection or what?
new ceo could be on horizon...who knows?
the company can do whatever it feels is the right thing now....and Brad is not more emotionally attached to this than he understands that he cannot run a company with limited cash forever.
Either he sells the company, gets more cash or saves more.
Like I said before, let Hero Motors or somebody else take over that gold bag sponsorship with Tiger Woods. Tiger Woods plays well again, and the wrist issue was more drama than reality.
The marketing needs to be revamped towards more information and education over multiple athletic endorsements. I think there is a limit to how many top names you really need.
As I see it...Musclepharm needs Arnold Schwarzenegger and colin Kaepernick....both are nice guys that actually are willing to work for Musclepharm and that are great endorsers.
The other endorsers signed last year are a waste of money....and the resources spent to support these endorsers could be spent better.
young people don't want to be like their parents....that's why Tiger Woods is a disaster. The kids that love Tiger Woods are not the trendsetters, that's the nerds that like to wear topsiders and wear same clothes as parents.
These kids from California still think it's cool to smoke weed and look like convict.....how is tiger woods from jupiter gonna deliver that? does he look like jim stoppani? is he down with the young people, talking street like colin and arnold?
the company can be sold, that's great news.
hopefully, the share price will find $7-8 level pretty soon....I see improved liquidity from this.....that will make musclepharm continue to grow aggressively, and fine tune marketing towards better information and educational content.
I see products being much more widely available, and Musclepharm being able obtain more referrals from online vendors.
Closure of SEC investigations means a lot to Musclepharm...no kidding, there are many doors that open when that becomes the past.
The uncertainty of unknown liabilities is put behind, so that alleviates the concerns that many creditors and investors had....
The stock is gonna rise....mark my words......
the only way is up baby...
if nothing material to company, then it's all positive to shareholders: possibly less dilution from surrendered stock grants, better creditworthiness of company, better reputation of company, less uncertainty to investors, uplisting to Nasdaq
Being under SEC investigation is very bad for a small company like Musclepharm that hadn't made it to the Nasdaq yet and that received lots of bad press because of it.
This will change lots of things.
liquidity issues are a whole lot less of a worry now. The bank got much less to worry about.
the stock should double in price on a closure to the SEC investigation imo.
Musclepharm is hurting a lot on all these investigations against it...the SEC investigation obviously being the worst as no public relations efforts could solve that.
Any other issues can be erased somehow with positive marketing efforts like the MP Institute of Sports Science, having some real scientists explain and endorse the products.....and make positive contacts to the media with executives, scientists and Arnold Schwarzenegger.
I truly hope that any publicity is good publicity for Musclepharm....I'm sure lots of people watched this moment.
http://espn.go.com/golf/masters15/story/_/id/12675632/tiger-woods-suffers-wrist-injury-masters
There is one study that suggests that is the case for a small unknown company like Musclepharm:
http://www.businessinsider.com/there-2011-2
This newly hired employee probably got lots of answers.
https://ca.linkedin.com/in/andreaspadvaiskas
Canadian that studied in Canada and in Brazil....hmmmm, peculiar!
I have never claimed that....it might be but it is not stated anywhere that Capstone Nutrition produces protein bars...There might be another manufacturer for that.
It seems like there is shift towards one manufacturer for the protein powder though, being Capstone Nutrition.
If Capstone Nutrition had the capabilities to produce protein bars, more power to Musclepharm.
$450 million revenue for combined mslp + capstone nutrition according to what Musclepharm told us....so your numbers are outdated.
Your numbers are very encouraging though, because that means Capstone Nutrition has some very competent people working for it, that made it grow very fast. Most likely most of Capstone Nutrition's contracts are relatively recent, meaning they won't expire anytime soon.
Capstone Nutrition might be a non risk transaction for Musclepharm.
Exited, Expired is probably better wording than terminated....but the effect is the same.
Clearly when you transfer $90 million business to one contract manufacturer with option to buy the contract manufacturer, then there is some shake up in manufacturing and some contract must have expired/been terminated when Musclepharm had two manufacturers.
Cellucor has the exact same business model as Musclepharm, it gets its products manufactured in Utah and in Georgia.
CONTRACT manufacturing is bound by a CONTRACT, meaning it is not such a flexible thing all together....so, when you exit a contract new opportunities arise.....to get your own manufacturing or to just renegotiate better terms, reflecting higher revenues and more power.