Muscle Pharm Corporation (MSLPQ)

[bellator_exec]

It would be humorous if it wasn't a such a reflection of the desperation of certain contributors and the company.

My statement:

One bad Quarter and shareholder value will be hit hard. This will likely occur within the next 12 months. Place your bets.

Certain contributors interpretation of same statement:

How do you know the company will produce a "bad quarter" in the next 12 months?

There are two types of investors.

1) Those who predict what will occur in the future and take a value position based on the probability before the actual occurrence.

2) Those who wait for absolute proof of a companies actual performance and wonder why they always pay retail.

If any here feel that WalMart and Sam's Club are going to reverse a lifetime trend of cut-throat wholesale purchase pricing from vendors then by all means feel free to model immense profits into your MSLP projections.

There is a plethora of historical data on the demise of competitors who carry the same products as WalMart and Sam's Club but GNC is bound to be different, correct?

GNC is charging $84.99 for a 5lb Arnold Whey Protein.

WalMart & Sam's Club are retailing the SAME product for $42.95

Anyone who sees this as positive for either GNC or MSLP is not in my thought camp. MSLP has horrific historical margins when viewed by any metric.

GNC news of a dedicated MSLP Product Wall has had no positive effect on MSLP PPS. Neither did the WalMart and Sam's Club news release. As a matter of fact the MSLP PPS has declined since the WalMart/Sam's press release.

We can now wait several quarters for absolute proof of the companies EPS performance and the effects of competition when taking on WalMart.

My view is MSLP is so desperate to show any growth (even nil or negative margin) due to the active SEC investigation that is likely to last for years and will prohibit any potential NASDAQ uplisting, that it felt forced to focus on revenue queens at the expense of actual earnings in the present and future. This decision is likely to have long term negative consequences.

Simply laundering dollars to show insignificant top line growth at the expense of long term EPS is not a sign of quality management. I know why MSLP is doing it and it is a sign of current desperation.

CEO Brad is flailing at anything that moves in an attempt to not stall the momentum, even opening his wallet with a very transparent and feeble attempt to show the SEC that he is now aligned with common shareholder values by initiating some token open market stock purchases, while granting himself another 500,000 shares for free naming himself a key employee retention recipient. CEO Brad still has his immense annual cash bonus award too in addition to his fat salary and perks such as corporate expensed two private country club memberships, monthly car and clothes allowances (huh?) and travel/lodging/F&B allowances.

I could expound on selected celebrity endorsement deals granting Brad company funded access to Golf Tournaments, Super Bowl, etc....but enough is enough. The old NFL would flag for "piling on".

A Zero Sum Game

The previous 24 months....

MSLP shares outstanding as of:

June 30, 2012 -- 1,633,675

June 30, 2013 -- 5,686,323

June 30, 2014 -- 11,863,882

As any remedial mathematician can plainly see, previous MSLP revenue growth has been more than offset by massive dilution. Another huge dilution round is already scheduled to vest December 31, 2015 as part of the remaining 83% award grant from 2013.

As the revenue growth rate slows, expect the dilution rate to follow. MSLP management view both growth rates as a zero sum game with regard to the common shareholder.

http://en.wikipedia.org/wiki/Zero-sum_game