I've followed NBEV for quite a while. Before the CBD mania I intended to post both a bull case and bear, concluding that the risk reward favored the bull case.
Now, in the short term, as the float turns over ever few hours, it's simply a casino bet.
What's interesting is that the former reasons for the bear case are largely intact, while the bull case has added a huge wild card, characterized by the company's continued
Bear Case
1) For small companies management is extra important.
2) Applying a price to sales multiple based on beverage company peers has always been ridiculous/misleading, when 1/2 the revenue come from the distribution business, which is worth .5 x sales.
3) The company botched its financing, costing it at leases six months of growth, and more importantly,
4) Management has consistently intimated (or tweeted) factors relating to the financing(s) that were misleading at best, and borderline criminal at worst (quote the former CFO, "no, the financing does not involve any equity.), after consistent guidance or revenue indications that were never approached (recall "run rate of $80M" in early 2017; then $90M - $110M in early 2018)
What I find really interesting now is how similarly the company has "informed" the marketplace of its CBD product introduction. That is, the same type of FUD, and therefore rampant uncertainty and credibility issues exist for CBD as they did for the financing. That process led to huge price swings, which could have been avoided with some transparency. Ultimately, and importantly, the financing was successful. But it cost 20% dilution, while providing paper profits of about $10M+ to insiders who knew about the CBD products and likely the timing of announcements. And now, of course, there is an order of magnitude more volatility, again spawned by PR'd hints.
So, here's how they chose, and are choosing these CBD announcements. First a highly cryptic single line about testing in a presentation. Then, a filing for trademarks . And finally the company announces the "debut of its CBD product portfolio."
The release contains the following three statements, which simultaneously lend the best insight into the real status of the portfolio, while leaving investors with a gargantuan range of possibilities regarding the most salient issues: timing. terms, and potential sales.
1) "New Age intends to unveil its portfolio and category insights with select retail partners at the NACS show on October 8th"
Who cares that they will share insights. What does this mean? Do they have products now or not?
2) "New Age will be meeting with some of the major retailers in the country at NACS on October 8-10th and taking orders on a first come, first serve basis, given anticipated demand."
Okay, more likely that there are products, or there will be products. But when? Are these to be actual orders for immediate shipment or pre-orders for delivery in a month or two or six? Or are they really just reservations (with or without refundable or non-refundable deposit)?
3) Marley Marketing Manager is quoted, "have developed unique consumer insights and ... (will) share those insights with key retail partners. We ...intend to launch the most efficacious and safe CBD-infused products for consumers"
So , the products will be under the Marley brand?? Why not say and/or show the cans?"
"Intend to launch" What the hell does that mean?
So, given the company's history and IR approach, and keeping in mind that the company has followed through on its main mission (albeit, slower and with more than several major pitfalls), I'm curious what estimates board followers think, as to what announcement. if any, will be made post 10/8 - 10/10, when the "CBD portfolio" will actually be shippable, and what 2019 revenue range is likely.
