Muscle Pharm Corporation (MSLPQ)

[MikeyInTheD]

I first invested in MSLP when the company first went public. I had tried a couple of their products and found them to be a better offering than many nasty tasting products from other companies. I did some research but the company was too early in development to be public and the stock was crushed.

Fast forward a few years and I bought a lot of shares around .65 and rode them all the way up to $12.00 before starting to trim my position. The company was firing on all cylinders and had finally caught the attention of the larger investment community. They were turning a profit per the financials at that time. The hype in the stock died down, financials fell apart and original management team left. It seemed a more experienced and professional management team was brought in to finish the turnaround. However, product lines were cut, sponsorship approach was changed and the focus on profitability was gone.

I do like the newer organic and grass-fed offerings from MP but the damage has already been done to the company and stock. The energy drink had the potential to be the number one product for the company and generate some major profits and customer visibility opportunities.

I have had a .65 price target on the stock for the past year and we are nearly there. I expect MP will be a takeout target once it gets to that level. Someone could buy it and try to make it more mainstream with distribution. They do have deals in place still with Kroger and Costco. A larger player could leverage distribution channels to expand sales and better deal with margin compression to increase sales. Without a deal the company will drop to .65 and should continue on a path lower. They are not viable as a standalone public company any longer. It is very sad to see this once good (can’t say great) company sink to these levels. Eventually it could be a sub-penny stock and move on puff piece PRs. I expect a buyout could occur around .85 a share once the current price drops further. Clorox has shown interest in consumable products the past few years with their purchases of Burt’s Bees and Rainbow vitamins. MP would be a nice addition and is mainstream enough to fit well in their portfolio without being too focused on niche musclebuilding community only.