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Because the stock they are awarded has substantial worth the moment it is awarded to them (although they must hold it for a specified period of time). If they were granted out-of-the-money leaps (basically long term options), they would only stand to benefit if they could increase the value of the only thing that really matters in the long run, MSLP stock. I might feel otherwise if they were sacrificing, in a huge way, with the tiniest of pay packages. But most of them are easily already making a market rate where the cash compensation component is concerned.
Please note that although I take issue with this, I will continue with my objective to hold a nice core position because I believe they will eventually dominate the supplement space (as well other areas where the strong branding can be leveraged, i.e. apparel, energy drinks, etc).
As always, simply my opinion.
Solid points, and excellent advice.
We are in full agreement. Time to make loyal shareholders some money (long overdue).
I wrote (and posted) this (proposed letter to shareholders, below in blue) a long time ago. I only wish MSLP sr. mgmt would read (or re-read) it:
link:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=97829518
I am old enough to remember when Microsoft first entered the word processing space with 'MS Word'. My colleagues were all using WordPerfect, and most gave MS Word little chance of capturing market share. Early on, MS Word was a bit buggy and not the best at word processing... then WordPerfect went extinct.
I also remember using Lotus 1-2-3 for all of my spreadsheet needs. It was synonomous with spreadsheet computing. Enter MS Excel. Once again, the early version was a bit buggy and many felt Lotus 1-2-3 was too dominant to be defeated. Seems as though that went the way of the dinosaurs, too.
As a long-time shareholder, I have been watching Muscle Pharm's moves (closely) for quite some time. As with other long-time shareholders, I have been frustrated and angered in the past, with the apparent lack of repect shown by sr. mgmt for the common stock (large stock awards to sr mgmt, terribly toxic financing arrangements). At present, on those fronts, I do see progress being made (especially so on the financing arrangements).
But what is more significant to me is MP's resemblance to the early MicroSoft in their aggressive launching of new products, to compete with the established industry giants.
When the combat crunch protein bars, the canned energy sport drinks, and (possibly) the RTD Amino 1 all gain traction, we will see the (financial and proverbial) birth of a star.
As always, simply my opinion.
MSLP
Three words... the next Nike. Let that resonate a bit, while you point out those obvious and critical missteps on that broken road, that led us straight to here (sung to the tune of Rascal Flatts 'Bless the Broken Road').
A disaster Q4. Revenue for Q4 was not only down, but was about $4 million lower than Q4 last year. Additionally, accounting loss was about one half of Q4 revenue.
It should not be a surprise to you that I added substantially (to my prior relatively small position) during Tuesday's massive sell-off.
Thanks again for the info. It is about time I signed up there, as there are sometimes some very interesting and insightful articles (many of which I've only read the first page, in the past).
Thanks for the link. I've never been able to see more than the first page. If I provide an e-mail address, can I then read these SA articles for free, or is there some membership charge?
One option, i suppose, would be to merge with a company that is generating free cash flow (in a reliable stream), but with few ideas. MP could then excel at their strength (marketing and product development), while the other folks could provide the funding organically and internally.
But in regard to the cash situation, I just don't see where the crisis is. As of December 13, 2014 , current assets (Cash + Accounts Receivables + Inventory) amounted to about $39 million, whereas current liabilities (Accounts Payable + Accrued Liabilities) amounted to about $35 million. That means there is a working capital surplus as of Dec 31, 2014. If the lion's share of the inventory they are holding is not obsolete (without seeing a detailed breakdown to crosscheck against the hot selling products, there's no way for me to know), that inventory will be converted into cash and applied to the rather large payables figure.
I can't comment on how the working capital and cash positions have changed since Dec 31, since the Q1 financial statements are not due yet. But it would appear, from the figures on the year end financials, that the may actually be doing a fairly decent job of juggling the cash and the financial obligations.
As always, simply my opinion.
BTW, it was already about 10am when I remembered there was a conference call that morning, so I have no idea what was discussed on the call. Did anyone of this board post summary notes for the call?
In the short run, I'd agree with you basebalplayr33. But if you are them and you truly believe that you have formulated a superior product set (or at least created something that can be viewed that way by others), you want to expose those products to as many newbies as possible.
And if the assessment of the usage stickiness (future brand loyalty) of the product is correct, you have created an ever growing future annuity. Once a sufficient base of users is established, a wise sr. management team can then cut back significantly on the frequency of the deep discounts, like the BOGO, finally providing a better gross margin. And when combined with the cost savings that will result from the new manufacturing consolidation, there could potentially be a very healthy gross margin in the near future.
Even with the relatively limited business background and business acumen that Brad has, I do think he is aware that if he were to focus almost exclusively on profitability, he could make it happen overnight. But I do not believe that he is willing to sacrifice (for the time being) top line growth for that profitability.
Back when this company was doing about 2-3 million per quarter in revenue, I expressed the belief that we were looking at the next Nike in the making. There have been a series of severe missteps along the way, but everything I see still confirms (to me) my early belief. And that is that Muscle Pharm will be the dominant force in the supplement space (and beyond).
As always, simply my opinion.
After yesterday's bloodbath, the RSI now sits at 7.56 (on the daily chart below). Anything under 30 generally represents an oversold condition. I expect a major retracement either today or tomorrow.
We might even see a move back up to a level which would fill part of yesterday's gap down.
As always, simply my opinion.
'Movements above 70 are interpreted as indicating overbought conditions; conversely, movements under 30 reflect oversold conditions. The level of 50 represents neutral market momentum and corresponds with the center line in other oscillators such as MACD.' - investopedia
MSLP
Nice....
My GRCU holdings actually have a googolplex number of zeros displayed when I bring up my portfolio screen (lol). Am I the winner?!?
I tend to agree with you here, turokman. And not only will Q1 be huge, IMO, but the wait (and associated buying opportunity) will be short (due to the short window between the longer deadline for the 10-K's (90 days + ext) and the shorter deadline for the next 10-Q (45 days + ext).
I suppose that one the things I was very wrong about, was when they were doing a tiny fraction of the current annually sales. While you were fairly confident they would be out of business in the near term, I felt confident they would be soon be an important player in the supplement space (and eventually be dominant).
Not sure, though, if I was very wrong about that.
Thanks, johncon... best of luck to you.
I will begin by saying that I firmly believed MSLP was going to have had a great Q4. That clearly did not happen; as we all now know. I will not mince words... the revenue for Q4 was a disaster.
That having been said, summing up Q4 '14 as 'it costs them $2 to make $1' demonstrates (to me) a lack of understanding of what much of the money was spent on - new product launch costs.
Let me state it this way. If I was building out a railroad, and I just added some new routes (and associated tracks) in Q4, I would not simply compare the revenue in Q4 against the track build-out costs in Q4 to determine whether there is the potential for greater revenue and profitability down the road. So even if generally accepted accounting principals require MP to expense those millions of dollars in advertising and promotion costs in Q4 (because unlike train track costs, they did not result in the generation of new hard assets) common sense dictates otherwise (from an ROI perspective, where the future value of the current investment is taken into account).
I'll leave it at that, for the time being. And I thank those that sold me some of the thousands of new shares I've acquired today, more than half of which were in the low 3s.
And as always, simply my opinion.
We need to train the whales better on the subtle (but important) distinction between placing a bid and slapping GRCU's ask. - lol
So, in the case where a TA has a general policy against providing share count updates for any of their clients, can we draw the conclusion that all clients of that TA have necessarily committed fraud?
What you are suggesting, once again, is that Green Cures is committing the clearest form of fraud, as to their reporting of their own share structure (each and every time that they have reported it). There's simply no other way to interpret it, based upon your argument below.
So if you have a single piece of evidence to support that allegation (of share structure fraud, or as you call it, 'creative writing'), I'd like you to post it here for all to review. I've made a similar request in the past, but you didn't seem to have such evidence at that time.
As always, simply my opinion.
No problem. I didn't think you had bad intent. And I hope my tone wasn't too harsh. Best of luck to you.
GRCU
It's not a big deal Rick, but if you are going to paste detailed, step-by-step instructions that someone else took the time to write, you should place them in quotes and acknowledge the original source (me).
Again, just pointing out what is the right thing to do. And I understand, you were simply posting them to help another person.
Your statement below just reminded me of the mighty Coca-Cola company. Are you aware that the main ingredient (other than water) in their flagship product is sugar. And guess where most of the sugar they put into the bottles comes from, before their bottling partners (those that they have not already re-acquired) slap the label on it? Countries such as 'Brazil, Colombia, Guatemala, India, the Philippines, Thailand and South Africa'. So if your point is that Green Cures is beginning to make moves like Coca-Cola, I think the future may be bright here and the potential may be huge for 'our' little OTC gem.
Explanation of the major component of the quarterly-loss.
Reported on the 10-Q was a net loss for the quarter ended 11/30/14 of $5,052,804. That is a very large number by any measure, but especially when compared to the total revenue for the quarter of $320,108.
What is important to understand though, is what the vast majority (4,575,975 of the $5,052,804, or about 90%) of that loss represents. The line item encompassing this figure is called 'Change in fair value of derivatives'. So what exactly causes this to occur? Share price fluctuations, from beginning of the reporting period to the end, trigger a restatement of a balance sheet item known as 'Derivative Liabilities'. This sits on the balance as a liability of the organization, but not the kind of liability that you would typically settle with actual money, such as rent or salaries payable. Simply stated, it is sort of a theoretical amount computed based upon the the terms of the derivative instrument(s), which in this case happen to be convertible notes.
So dilutive convertible notes, which are all too common in the OTC (where an ever increasing number of shares have to be issued to settle those notes, as a corp's share price declines), impact this account from period-to-period. When the computed liability amount goes up from period-to-period (as happened in the 10-q that was just released), the increase is booked as a loss for the period (even though no cash went out the door, or will need to go out the door to settle that liability increase). For example, based upon the share price fluctuations, that same computed liability account balance could go back down by more than $4 million next quarter (without any payment being made to satisfy it), and an offsetting gain would then be booked next quarter as large as the loss on the derivative liabilities increase that was booked this period.
But just because it's not a cash loss, and just because it could disappear as quickly as it came, that does not mean that there's no negatives associated with this type of liability. Any derivative liability represents real uncertainty to the organization responsible (such as the possibility of extreme dilution from convertible debt with highly unfavorable terms).
But I believe that it is important to distinguish a loss generated from derivative liabilities from a loss that resulted from real operational expenditures. Mainly because real operational expenses (i.e. rent, salaries, marketing, product development) are recurring and sort of consistent from period-to-period, whereas the derivatives liabilities loss may completely disappear (and even show a huge gain) the very next reporting period. And once again, a widely fluctuating share price is the main cause of such a phenomenon.
I hope this information is somewhat helpful. And as always, simply my opinion.
STTK
I appreciate your opinion, but I would be very unhappy if Glanbia bought MP for $200 million. I was on this board suggesting that Glanbia should have bought MP (to protect the future value of their Optimum and BSN acquisitions), when MP was on the brink of BK and sales were a tiny fraction of the level they are at now. Even with Brad's hubris, I am fairly certain they could have acquired it (or at least gotten into a position to control it) for peanuts.
With things like the overwhelmingly positive reception that the MP protein bars have been getting, companies like Quest nutrition may eventually be left in the wake. I could be mistaken, but it appeared to me that Quest nutrition began to diversify into other supplement areas right around the time MP had released their Combat crunch protein bar line.
I think that all of the signs are there for a much greater future for MP than the present. Thus far, I have not been rewarded sufficiently for this strongly held belief. When the SEC investigation has eventually been concluded, I think that the market will recognize where Muscle Pharm is going.
As always, simply my opinion.
Nearly 3 years ago, approx April of 2012, I created my own spin on the Muscle Pharm logo (see below). Around that same time, MP had just recently released their sales results for full year 2011. The total revenue they had done for that year (ended Dec 2011) was around $20 million.
There's a distinct possibility that when Muscle Pharm releases their full year results for full year 2014 within the next few weeks, we'll see total revenue in the ballpark of around $200,000,000. While traders may have done well in MSLP, it is fairly obvious (to anyone paying attention) that Muscle Pharm's stock has not performed well for long-term investors over the past 3 years. But there's another thing that should be fairly obvious. From the scale of operations and depth of product line that Muscle Pharm has developed, this company is on track to become what I have firmly believed (and communicated) since I began posting a very long time ago... The 'Nike' of Supplements.
As always, simply my opinion.
MSLP
Although they are in different industries and have little in common from a business perspective, I'd like to make a comparison between Green Cures and Sirius Satellite radio which I think is useful.
If one were to study the Sirius satellite radio 10 year chart, one would find that in the period of late 2005 to early 2009, SIR# dropped from a high of about $7.50 per share to a low of just above .05 per share. This represented a drop of more than 99% from the peak. During that same period (of the precipitous share price drop), Sirius grew their subscriber base from about 3.3 million to about 19 million by early 2009 (included in these figures is the merged subscribers from XM). This share price destruction, at the same time as the strong growth in subscribers, amplifies the point that share price performance may not be closely correlated with particular internal positive developments (the company bleeding cash was the primary cause of the share price drop). The fact that a rescue package catalyst began a share price recovery which has continued to the tune of about 80x (from the bottom) also demonstrates that it is never too late for a downward trending share price to begin to recover, and then eventually produce extraordinary gains. Additionally, there is now no doubt that Sirius now dominates the radio broadcast and content space, even though the deep share price drop would have seemed to indicate a different probable outcome.
I can't help but feel that the conclusion you have drawn, based upon the rationale presented below, is weak at best.
As always, simply my opinion.
Thanks for the acceptance speech shout-out, Rick. I know that this recent price action has been painful, but GRCU will have its day.
As always, simply my opinion.
I second the motion, Sandman44. I will work on a graphic depiction tomorrow.
Rick, just for the record, you're the best. Your unwavering support for GRCU is inspirational. For the record, I am a little tipsy at the moment. But that does not change, one bit, the fact that I firmly believe GRCU will perform similar to FIT* after the consolidation period (9 month period of hurry-up-and-wait) on the chart I've attached below. Is there a distinct possibility that this extreme pop may never occur - of course.
But do I feel, with every fiber of my being, that this will pop significantly - absolutely.
I suppose that time will tell. As always, simply my opinion.
I posted this here on 8/30/2013....
Imagine the following hypothetical scenario. A supplement company, which has already expressed their intention to produce a superior energy shot (for distribution via convenience stores) is shopping around for a manufacturer of said energy shots. In the past, manufacturers have only allowed for small profit margins, because the supplement company needed the manufacturers more than the manufacturers needed the supplement company. So the supplement company decides to use a slightly different approach.
The supplement company, harnessing the access to their new powerful and influential contacts, seeks the following situation. Locate a manufacturer meeting the following criteria:
- Facilities with idle capacity
- Knowledge and ability to produce liquid dietary supplements
- In need of current funding
- Big enough to fulfill the manufacturing requirements, yet small enough where the stock could appreciate meaningfully based upon a contract manufacturing arrangement with one new, large client
Strategy: Offer the needed funding to a manufacturer, in exchange for a cost effective manufacturing deal of the planned energy shots, along with an opportunity to participate in the any upside move in the manufacturers equity value (via stock warrants). The deal would benefit the manufacturer, because they could fill current idle capacity at their facilities, obtain needed funding, and have their stock price appreciate due to increased public exposure along with the anticipated rapid growth in their contract manufacturing business.
It's one possible explanation for why Muscle Pharm is on the lending side of a deal at this point in time. As always, simply my opinion.
link:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=91583894
MSLP
Absolutely correct, after being up 4900x from the low about 4 months earlier. BTW, that equates to 490,000% (from .0001 to .049). Just curious how come that part never gets mentioned in your thorough analysis.
Are you referring to the 8 (eight) month stretch in which one could have taken money off of the table for between .05 (a nickel) and .10 (a dime), after having 9 months to accumulate at less than .01 (and for much of that time, low tenths of a cent).
I only hope that Green Cures offers such a small window of opportunity. I expect it will, and that is why I remain in the stock.
As always, simply my opinion.
Since GRCU is now trading very similar to the way fit* was trading in the region of the chart I've identified as '9 long, painful months of hurry-up-and-wait' (see below), would you say that those who bought it within that range were disappointed with the price action that eventually followed?
IMO, the people buying GRCU at current levels may be very surprised at just how well the stock performs in the coming months.