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What award did he win?
Nobody wants to hear it...
So here's my nothing post.
FUD? No. Actual uncertainty.
Did you even read the tweets? Even the CEO has no idea when their reporting will be finalized and the auditor has obviously ran into some questions they are trying to take care of in this process. At least we now know it is a rigorous one.
Timeliness is important, regardless of this board's echo chamber "opinion." There will be no institutional investment until they get their crap together.
For this reason alone and the associated de-risking effects, I'm very glad they have a new auditor. The upside is that the new auditor is putting the company through its paces which should bring more market credibility. In the meantime... It underscores the level of risk we have already taken with this security, as there are clearly issues to be worked through.
What's the over/under on the 10K date? (Redux)
Since I played this game in January (and Renegades and I were the only winners), let's play again!
DOUBLE OR NOTHING:
I put the 10K release on Tuesday February 25th, after market close.
Show me one institutional investor who doesn’t care about reporting timeliness.
And there never will be any until they get this right once and for all — AndI care primarily because I don’t want this retail base to make up the entire cap table for very much longer. It's REALLY annoying.
I'm not sure I've ever felt 100% confident about anything...
Certainly not with management's tendency to be overly optimistic with their projections of timing. This is an area Verus management genuinely can stand to improve. People were hating on me because it was clear that they would be missing the timely filing - I promised to admit I was wrong if it arrived on time - no big deal. I would not encourage the idea here that they are arriving "on time" with the extension.
Yes. Paying close attention. Since 2017.
They used the audit firm as an excuse for tardiness as we predicted for the last month.
Total confidence?
I have a dispassionate level of appropriate confidence where warranted. They were going to miss on-time delivery. I've been saying it for a month.
However, the sky is not falling. Now I see impassioned bears talking about decreasing Verus revenue — that's equally stupid and not the reality. Revenues are growing. The inconsistency on timely reporting does have a material impact on directional price momentum in the stock. No doubt about it.
Management gets a needs improvement for delivering timely reporting. They are clearly aware of it and I hope for the rest of the year they get their crap together and on time. I'm long. I've been long for a couple of years.
Some reasonable criticism is appropriate. This board needs balance.
We need deeper pockets in the cap table
The board largely is retail investors trying to maintain the price, but that only lasts so long. Whenever management provides more consistency of expectations and delivery I think we’ll get some smaller institutional investments, but this is the reality for now. Being late on the 10K means something regardless of whether or not a few of the people on here who want to pretend it doesn’t. Consistency and execution are material.
Management has made a lot of progress, but we have lots of room for improvement. I’m holding long, but I’m tired of the attitude many on this board have where you get piled on for legitimate criticisms.
I’m an investor, not a speculator addicted to hopium.
Exactly..
And despite the usual vitriol for even the slightest criticism on this board, it is highly likely at this point that they will file for an extension, and Mark's "followed by a 15-day extension" language basically is level setting for that expectation. Which is all I've been saying.
People ask, "What's wrong with it being late? Who cares?" Well, management has been very clear that Chris has worked to get them on schedule and the plan is to be on time going forward. So when you promise the market something, not delivering undermines credibility. I am not hating on Verus — but it is fair to say that they will find more, deeper pocketed investors by saying what they are going to do, doing what they said they were going to do, and then pointing out how they did what they promised. Consistency is key. It builds trust.
They have made strides, but they have had all the time in the world to get these financials ready.
The filing will be late, in my view.
I'd say at 85% certainty at this point. My question is how late? If I'm wrong I'll happily come back to the board and say "hey all you guys and gals - I was wrong!" NBD
Question...
Can you think of one or two conditions or eventualities that would change your position on being invested in Verus for years to come?
It seems to me that as a going concern very early in its development, there are many variables we just can't know.
If they file on time I'll be the first to post "Hey ya'll I was wrong! They did it!"
Integration of Nutribrands financials + audit
You know that this is part of what they are getting done, right? It's a non-trivial process. I hope you're right, but I give it a low probability.
For me that's basically a given
I'm just wondering who's putting bets on a date.
What's the over/under on the 10K date?
Lack of understanding of risks and issues
Dewm, your lack of understanding of some of the key issues this note gives rise to is actually an argument in favor of OTC trades being regulated for accredited investors only.
You used to bash this stock—apparently now you’re pumping. Why not take a balanced approach to risks and rewards? Good grief.
Really? Do me a favor...
Please post a list of Verus board directors and their ownership percentage. I'll wait.
Did everyone read this post?
Thanks for sharing, R17
Our board has got to start buying. It's an old refrain that I've sadly stopped singing. It's time to start this tune again. Too much good is going on for board ownership to be abysmally low. All of the insiders should be buying Verus stock.
Nutribands — Audited Financials Due Soon
Absolutely I'm looking forward to seeing those this week (hopefully). What was the close date? October 30th probably? Does that give them until Monday January 13th to release audited financials?
Thanks for being so diligent with these timings, R17.
Good to see you both posting.
Two of my fave VRUS OGs.
Majority?
Curious your source and what percentage. Majority could mean anything over 50.00%
So we're clear:
I'm not speculating. And neither is Renegades17. There just isn't room for anything less than clear, granular breakdown on revenues and visibility into margins from this point forward. Anyone who has been in this stock as long as you have - I'd assume you'd expect those things, too, at this point.
I understand what Mark is saying, but I also know that any institutional investors and/or analysts that are interested in the stock are going to demand it. So they are going to need to change that practice to industry norms or we'll all suffer due to the additional perceived risk in the stock for lack of transparency.
Yes, they will vary. It’s important that we know what they actually are, though.
A few thoughts...
First, I would strongly echo your sentiment regarding revenue granularity. We need considerably more information in that regard from this point forward. They are building a business that is relatively complex given the wide product mix and jurisdictional variability and dispersion and it's no longer appropriate to just give aggregate revenues: Both existing investors with any marginal amount of sophistication and new (ideally) institutional ones simply must have it to understand what's going on. Previously I've been willing to give them a pass based on the formative nature of the company with the reorg, but that time has passed. I'm sure Chris Cutchens anticipates this expectation from investors and certainly any analyst that might pick up the stock in early 2020.
I missed your previous 2020 projection—well done. My perspective on margins is that margins have interplay with my first point. If we get no granularity on revenues (with which we can see delta over time) it's going to be very difficult for markets to price in any credit for improving margins toward their stated targets (and the concern here is that they could be lower than guidance). I recognize that early channel acquisition costs are going to give rise to increased revenue and cross-selling over time. In my view, what makes markets nervous is a lack of transparency on these things. Until we see the full picture my guess is that markets will not price in much in terms forward revenue growth, primarily because without the transparency there is simply more risk. It is time to normalize reporting to institutional standards.
Side note: While I'm glad that they released the deck on Friday, it was not "as promised." It was promised before Thanksgiving. Those details matter and whether management recognizes it or not, those perceptions ultimately get reflected in the stock price. It's really pretty simple: say what you're going to do and when you're going to do it. Then deliver.
I aim to please :)
Too true - the lack of granularity in revenues, for me, makes it seem a bit futile to go down that route and just settle on a blunt year-over-year approach. I'm hoping Q4 - as they've signaled - truly turns out to be the quarter where Verus turns the proverbial corner. We'll see. Also, that deck should show up today. We'll see what's included. I bet it'll be high level. I know you value high-level information.
What is reasonable & what I'm hoping for...
A few assumptions—a reasonable increase in the growth rate as a multiple of Q4 2018 revenues should put the revenues conservatively at about $5.94mm for Q4. That's below your lower bound of $6.5mm, but if they do that—and they certainly should achieve it—I think it's a positive sign with room to accelerate. They are still executing on their plan, above how they've guided this year, and have managed to get some milestones under their belt.
What I'm hoping for is clocking a little bit (not too much, but just enough) of an unexpected increase in Q4 revenues of Q4 2018, so that we get a reset in the comfort level of this retail base and also set the stage for increased lines of credit and institutional buyers in 2020. What is my hope in number form? Well, keep in mind that I always play Price is Right rules—the closest without going over—but I'm willing to push my luck a little here with fingers crossed. $7.2mm. Final answer. An absolute wet finger in the wind and a guess. If they book $5.94mm I'm content. Over $7.00mm I'm pleased. Over $7.2mm I win.
Product revenue by category is a very reasonable ask that any investor with a modicum of sophistication needs... to say nothing of any potential analyst that might pick up the stock as a result of these conferences. They definitely should be breaking that down going forward. I don't know that we'll get that in this 10K, but I will ask questions on the next call and they need to hear that it is an expectation.
What are market expectations?
It seems to me that in order to get a real catalyst, whatever the market expectations are for Q4 need to actually be beaten. The trick is, with an all-retail base and no analyst coverage it's really difficult to guess what the market might be expecting.
So what do you expect?
You should read all of the filings for the trailing 8 quarters. This “loss” is fine.
Also, please turn off your caps lock, grandpa.
Mr. Market is off his meds. Again.
I have a fairly substantial position in VRUS and it has been my plan to hold it for the next several years as the company grows, but at this level I really am thinking I might increase it. It’s pretty frustrating to see retail on this board going from manic highs to depressive lows — and back again over and over — during the past 2+ years. The trend is generally up and to the right. Revenues are relatively low still compared to most any public company — in other words huge room to continue growing— and they are growing the team with A players. What in the world more could you ask for?
2019 vs 2020
The way I'm wired is more of a "rip the Band-Aid off" kind of guy. My perception is that all of these retail mindset people in the OTC are going to freak out regardless of how sane a share restructuring is. Also, while it shouldn't really matter, for many there is something symbolic of January 1st and a new calendar year. If they are going to do it, my Christmas wish would be for them to get it done in the next 8 weeks and start 2020 with a fresh story to tell.
I don't think they would ever consider not proportionately decreasing the authorized shares in a reverse split. I think management really believes in the Verus story and that would be counterproductive if they didn't do so.
Yep. I get it. I just see the board too often (in my view) try to see a direct price movement from the immediate revenues of one thing or another, which seems to lead to a lot of disappointment... and for the french fries in particular, I don't anticipate much if any immediate price action as a result of revenue.
For me it seemed clear that the french fry business wasn't so much about acquiring revenue as it is about getting a) complimentary products that make Verus an easier partner for customers to choose and b) channel acquisition for the french fry company's existing (non-Verus) customers.
In short, I think the 6-18 month time frame would realize more benefit from those things than like many seem to think... that it's just going to immediately layer on $X million in revenues per quarter.
I did my own math, guy. The point is that Joe Public doesn’t parse this stuff analytically and I was agreeing to his point that they can leave out the guess work and be clear in comms and it’s extremely easy for them to improve communication and level setting of expectations.
Your point for #2 is spot on.
We keep hearing "triple digit growth" which I've always assumed to be year over year (but I'm not sure most of the people owning VRUS do), but 999% (10x) is also "triple digit" — I think people read "triple" and cling onto that like they are going to see some unnatural growth rates. This isn't a software company - takes time to get products into new channels and on shelves. So yes I agree. They need to be very specific about their guidance so it doesn't unnecessarily drive volatility in the market. I'm okay with growth, but it's pretty easy to "140-175% year over year revenue growth" for example, or to your point, pretty easy to just give a revenue range and let us do the math ourselves as far as growth rates.
Question: If you really believe there's some manipulation conspiracy afoot, why not also talk about it on days when there are consecutive 20% moves to the upside?
Surely "manipulation" can work in 2 directions...
I reject the idea that it necessarily is “a” seller. Certainly many people sold today and probably for a wide variety of reasons... however misguided I think they might be.
Neither. My opinion. Why:
Short interest: there isn't enough shortable float out there to move the needle with volume like that.
Dilution: the capital structure is locked and it's not in management's interest to do that at this point.
Hey thanks for that! Followed you back and I've read your posts for some time on here. I made my very first purchase I believe it was in November - nearly 2 years ago. It was speculation at the time, but I averaged down, watched things develop and de-risked, and happy to be along for the ride now.
It's pretty frustrating to see so many super short-term views, so it's nice to know when you're in it for the long-haul with some others.