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It is an interesting analysis and may be true. But the other truth is that loyal invested got hosed on this stock. Many early investors have no chance to recover their money. Management has done absolutely nothing to show it cares about investors. When you double the issued to pay yourself, you just took half of every one of your investors' value to pay yourself.
The bottom line, MSLP has awesome products and Brad and team did an awesome job building the brand, but they do not care about investors. And when this stock pops up there is going to be a shareholder lawsuit over the bonus they issued themselves, and it is going to cost them a lot of money! They implemented the plan as a sales incentive with one month left in the year retro to January. My attorney says these guys are going to pay dearly for that move.
Great marketing, great products, but it has not been a good Company for investors.
Thank you for your post! Very interesting.
I agree, Thursday and Friday will be great days. And in May we need a good Revenue report and some earnings reported. It that happens we should see 5 cents.
Codie,
Why would you encourage people to sell when the stock is running up fast? IMO not solid advise.
What are the big transactions that take place each day right after the market closes?
It is the wrong thing to file a lawsuit on. They are not making that much money selling clothing. I know as a fact that they are most vulnerable on the management bonuses.
I have been very frustrated by the lack of response to my questions. John Bluher was a huge add to the team and I am encouraged he responded. Just my guess, but it looks to me like they are trying to right this ship. I think that there is either somebody going to acquire MSLP or they will be moving to a bigger board. Moving to a bigger board would be good because there is much better governance than on the BB and pink sheets. They can get away with many things now, but I can assure you the management bonuses will come back to haunt them in a big way.
That funny, I keep asking the same question. I own more that I intended because I have had to average down numerous times. :)
I believe that your explanation of the bonus is off basis. Once you go public, you no longer own the Company. All shareholders own the company. To steal 50% of the Company from other shareholder is wrong, and I believe will also cost MusclePharm a lot of money in a class action.
oldengray,
I think it is awesome news if true that "bonus stock awards" are being paid out in cash vs stock. Do you really think that is the case?
S1 - Information. Outstanding shares 710 Million. Investors purchased warrants at .015. No new shares will be issued - investors expect to profit above .015. The Stock Awards were not counted as outstanding shares and benificial ownership as a % of MSLP has been reduced for Pyatt and Gregory. (Opinion) - Indicates the awards will be paid in cash and not stock. The Bad news. PPS was .015 the first of the year and 135 Million convertables were issued starting early in January. KRASHH
Actually it is an illegal practice to issue yourself 50% of the Company through a bonus plan that you communicate to shareholders in November of that year. This is exactly the type of behavior the SEC enforces. But it does not matter what actions the SEC takes because they will lose big on a class action. I too believe the stock has a good chance of climbing, and when it does, their liability increase significantly.
I do not believe what they did around the bonus is legal, and they will likely pay a costly price. Name another company that got away with issuing themselves a bonus equal to more than 50% of the Company and communicated the plan to investors in the final quarter of that year. SEC is reviewing these actions, but regardless they will lose in court.
I do not believe the 51% voting right is a violation. But what they did with the bonus sure will be looked at by the SEC. I also think this will result in a class action once the share price increases.
The reason they issued so many shares is to grab 50% of the value from current shareholders. They know this stock will eventually go up in price. It was a total greed grab and it was at the expense of their shareholders. This stock should be trading at 10 cents.
Come on Odessa! You can always half the pie again. If the stock is at the same price one year from now (nobody knows), they will likely take half of the Company again and all of the shareholder value gained. The only real variable is how much they will have diluted the company on other spending and other schemes. They can add a new compensation scheme on the already existing plans. It is plain wrong! You are an owner and need to see what is happening here.
Odessa99, based on your own projections MSLP revenues will be $50 million this year. Based on that projection, next year this time, they will be stealing over half of the Company again.
Thanks Odessa99! Great post. You have to admit, implementing the bonus plan at the end of the year was just a way to steal over 50% of the Company's ownership from shareholders. And doing it at time when the stock has dropped from $1 to 1 penny, and not shown it's first $1 in earnings is wrong. I know this now has the SEC's attention, so we will see eventually see what happens. I think once this stock goes up, they are going to be paying out a lot of money in a class action lawsuit. I think the executives got too greedy and it will cost them. Longterm it will also cost us shareholders.
Good post. As long as the current bonus structure is in place we are screwed! They are paying themselves 33% of every revenue dollar collected in bonus. 11% each times 3 people. 30% with stock and 3% with cash. There is no investor value as long as this bonus is in place.
New management bonuses just paid. Brad & Cory each just given over 148 Million shares EACH.
DocMark, my comment had absolutely nothing to do with your post. I did not reply to your post.
The last thing Brad needs is more money to spend. Dilution will never stop with these guys! Greater revenue growth results in greater dilution. Read the bonus plan, play with some revenue scenarios. With this bonus plan in place, shareholders are screwed. The greater the revenues, the greater the dilution. It is automatic!
Below is an exert from my post on November 30. Some may of thought I was crazy, but actually I was too optimistic. I still think this Company has potential but we need to get rid of the management team first.
Post from 11/30/2011:
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 like your idea! I don't like dishonest people, it will interesting what they would find in a criminal audit. The bonus is the last straw for me as well. We need to turn the heat on these guys through our contacts. This is plain wrong. There is enough honest money to be made in this stock, I can not stand crooks!
Jwblue74, you have been one of the most positive supporter of MSLP, and when you get mad, I know we are getting screwed. This is outright robbery. The SEC needs to step in here. These crooks are not going to explain their position to the shareholders. They can care less about us. Their bonus plan that they implemented in the last quarter of the year to steal 50% of the Company needs to be challenged. There has to be something big that we can do.
There is no Board! It is Brad and Cory.
I think MSLP will get smarter in signing athletes, and how to pay them. But MSLP is an athletes' company target at elite athletes. I think hitting many sports is better than just targeting the UFC. The product has a great reputation among a broad population today.
There is no evidence that the dilution will stop or even slow for that matter. The bonus structure guarantees heavy dilution and kills all longterm potential of driving share price.
With MSLP's awesome revenue growth, if they focused on showing some earnings and modified the bonus plan, we could see 50 cents. But significant changes need to happen.
All three will receive a bonus. I was wrong thinking it was at the 20 trading days prior to end of year. And you can see the correct calculation below:
The price isn't based on the 20 trading days prior to year end. They can't issue the Bonus Shares until the Audited Financials are completed for 2011. It is based on the average closing price for the 20 trading days prior to the date of issuance. The bonus payments will be made by 31 March the latest.
Thank you jwblue74. I stand corrected on the bonus share price.
They will have to increase their authorized shares in order to issue the shares. The price is based on the 20 prior trading days prior to the year end. They will need a minimum of 510,000,000.
MSLP is an awesome company with great product but the executives have put the screw to the shareholders. These latest moves will come back to haunt them. It will be interesting to see what action the SEC takes on their bonus plan.
All three got 170,000,000 shares each for a total of 510,000,000. Okay with getting rewarded, but this is way out of bounds and steals the value from their shareholders. Yes Jeremy is the 3rd person.
This stock would take off if management was even a little responsible to the shareholder. Their bonus payment of 510,000,000 shares will double the number of issued shares. This value was not earned it was stolen from shareholders. The plan was approved in November with less than two months left in the year. The risk is every dollar the Company makes, the ownership will put in their own pocket.
Now maybe the SEC steps in and takes appropriate action. It is hard to invest in MSLP when management can award all the value created to themselves.
Codie,
I think the difference is we are serious investors in MSLP. We are both positive (of the potential) and critical of the management decisions. however, we want the stock to go up.
It seems like your sole focus is too sink the Company. Getting a picture to turn them into NSF. You have been upbeat when the stock drops in price. You have been exposed on this Board. I think that you are better posting on another Board.
Is there anything we can do to stop rapid dilution from the executive bonuses? It was approved in November and in effect for the whole year. That is not an incentive plan. This executive bonus doubled the number of issued shares. Do we have any grounds to challenge this one?
Codie, you thrive on anything that goes wrong. Go back and read all your posts.
Codie,
All you are doing is trying to destroy MSLP. Why don't you go get your own photos. Most people on this Board have not time for you. You work for the competitor and are a complete loser!
I find it almost unbelievable that management put in this plan at a time of showing no earnings and heavy dilution, and the stock trading under a penny.
It is almost like they intentionally killed the share price and their shareholders. They could of made the same amount of money issuing one third of the shares, because the stock price would rocket and they would be much more trusted by shareholders. It seems like Brad, Cory and Jeremy are so greedy that they only care about themselves. This sentiment has been communicated many times on this Board, but this "for me" is the first time they showed their greed, and lack of respect for shareholders, who have invested a lot of money in MSLP under their leadership and trust.
How would it be possible to grow the share price with this bonus program in place?