OK, let's clear up some expensive misconceptions.
1. MM's don't affect the price of a stock. They are middlemen. They take orders to buy and sell, execute them and report them. On the OTC, they don't generally hold inventory of any size, and usually, they sell shares (short) first, then cover with a buy.
2. Revenues are important only to the extent they drive profits. This is only not the case with companies that have very small variable costs, such as a software company or media company. For them, building revenues quickly because their costs are fixed and down the road, are expected to lead to huge profits. For consumer products companies such as CELH, they need to demonstrate that they can increase revenues steadily AND that those revenues are either profitable or headed that way quickly. Increasing revenues while you lose money isn't very difficult for any company.
3. CELH's history has not been good on #2. Profits are inconsistent and with a negative overall history. Revenues grow quickly one quarter, then slow down the next. Costs are all over the place.
4. A public company traded on an exchange (i.e. bigger than CELH by a lot) is valued based on its P/E ratio (and dividend, if it has one). FIZZ, a high growth bev company's P/E is 34 and their P/S is 1.62
CELH's P/E, taking their best quarter ever times 4, is 75 and their current P/S is just under 4. CELH's price would never hold up on an exchange, and as they grow, even on the OTC it will become more difficult to maintain a valuation based on hype and low volume trading, as they have done since the outside investment.
“No one in this world, so far as I know — and I have searched the records for years, and employed agents to help me — has ever lost money by underestimating the intelligence of the great masses of the plain people"
H.L. Mencken
AI
