AI
Monday, October 27, 2008 2:11:28 PM
Letter received from CEO of DKAM
I had some questions I wanted to get answered as I was unable to call in on this past CC. I want you to read the following response I received. Keep it close and maybe once a week, read it again. I won't tell you it is all the things I have been telling you over and over. If it doesn't make you want to own this stock, then I don't know what will. If it doesn't make you want to tell everyone you know about this opportunity then sadly you will miss every pot at the end of every rainbow. I love the reference to Vitamin Water, which was bought out for $4 billion, and of which the company just trademarked two names with the same 50 Cent.
Dear Mr. XXXXXXX,
There is so much bad information out there about the way we do business and why we are successful that I wanted to share with you some specifics as you speak to people about the various concerns they have as expressed in mindless blogging.
Perhaps as you have opened my eyes to the view of the market about securities, by sharing some of my world generically with you, just organizing the information in the public domain, we can somehow get at least some of those who follow the stock to separate the business from the trading of the stock and the assessment of the business so deeply rooted in what can only be called "wrong." None of what I am organizing here is confidential and certainly all of the information is available in the public domain. I would argue its more important how you organize the information that is being missed.
About the Value of Beverages:
1. The value of Drinks will ultimately be measured by the sum total of the value of the brands that comprise Drinks. Spirits transact at $1500-2000 per case. Beer depending on if there is a brewery at $100-500 per case and New Age Non Archaeology at the Sobe multiple of $14 or the Vitamin Water Multiple of $28.
2. Large global companies get to these premium multiples because they sit down and figure out what it will take to replicate what has been created and it is always more expensive.
3. Drinks is an IP company that is operating in the beverage field where there are superior multiples.
4. You can look at Seagrams' acquisition of Martel 20 years ago or Compari's acquisition of Cabo Wabo several months ago or with Grey Goose in between and the fact is the multiples hold up.
5. Bloggers say who cares and who would pay these multiples. The answer is No One, Until the Day they decide they will, then Every Company will seize on paying the multiples. We had a theoretical conversation with an large American, now Internationally owned beer company who before they were so rudely acquired, wanted to know if we would take $5 million for Rheingold. We dont sell a case we just own the trademark.
About the Drivers of Purchase/Acquisition:
1. Long Term sustainability is judged by global company managers who recognize that to compete and survive for more than a year means you are Superman. We have been moving the rock up the hill for four years.
2. Global Viability: When brands sell in more than the US that means when a true global company buys them they have legs in a legit business model. Bacardi has trouble selling Grey Goose in some International markets. My Trump Tie can be sold on any global street corner today with no marketing for north of $200 and in Manhattan or Michigan Ave no one would look at it. We are selling Trump in a lot of International markets and they are repeating orders. More about that later....
3. Cost of Expansion and Growth: No large company wants to buy a brand and do the heavy lifting. We spent what would be considered the Brooklyn budget to introduce our vodka in 46 states and 6 countries. No large company wants to spend to establish a trademark and they all fear what they buy may not exist. Most companies could not keep the lights on with what we have paid in marketing to build out 100,000 case intro.
SO WHAT IF?? no one buys you:
1. That was the good news for Constellation and Mr. Sands. He sold a product called Wild Irish Rose, flask wine for bums and various other products, then one by one, the products began to add up and before you know it, a multi-billion dollar enterprise came about.
2. If you thought there was no future in one of our products and it was only going to sell lets say 50,000 cases a year, and then you took and added the same moderate success to Dre, and Rock, and what we have in the pipeline, and before you know it the sum total of your failures is one of the largest mid-sized beverage companies in America.
3. If first you have one brand and then in no time you have five and six and more brands, critical mass comes very quickly.
4. "I don't see the product in my neighborhood location of xyz." That's the good news! If we were doing the case sales we are and it was everywhere, where is the upside? Where is the growth?
"THEY DON'T HAVE ENOUGH MONEY TO DEVELOP THE BRANDS THEY ARE TALKING ABOUT"
1. What money. We have a cognac, a sparkling vodka, a new international vodka, a prototype beer for rock. I have the labels, the bottles, the product, the partners. Does anyone think that with partners like Universal, Dre the perfectionist, Trump, Rock,,,,that they are perfectionist in everything but with our product development they just took a wild hairy assed flyer with us???? If everyone who had a cognac wanted the Dre Cognac, and every major company came to my door saying pick me, pick me,,,,,why would I pay for product development? I might interview for it, I might look at various options, but why pay,,,,the world wants to do business with us. Make me a good product, help me source it, give me some credit I might pick you. Refuse to do any one of these and off the list you go.
"THE BRANDS ARE NOT SELLING"
1. Perhaps the most maddening. On our website are the + 100 NYC retail accounts we do business in. There are hundreds of accounts we are doing business in and guess what ,,,,there are hundreds that we are not and that's the good news,,,,as there is more to sell. Not just when it is promoted but when no one is there and they simply sell it.
2. "Its not at (you fill in the blank)." Everyplace a brand is not that is viable and been around and is growing, and the more places the brand is not, the more upside the brand has.
"THEY DON'T HAVE THE MONEY TO EXECUTE THEIR PLAN"
1. Notice that all our Icons have media systems behind them. Dre, Universal, Rock. Top song on all charts last 8 months. These Icons have media machines that generate everything we had to get Trump to fit into. The management company that is partners on the cognac have 250 artists that will manage to have the cognac in their music videos in addition to the lead artist.
2. Notice that we have negotiated all our agreements to include credit from our new production partners.
3. Half the battle of selling a product is public awareness. Who did we miss?
FINALLY, "THE STOCK SYMBOL ISN'T EVERYWHERE"
Our relationship with the Icons of the world is unparalleled. The unfolding of the story and the simultaneous investment story is equally linear. We, with no IR company, got on more financial news blogs, magazines, on line and in the media with Kid Rock and or Dre than any 15 small cap companies you know. The irrational temptation is to say,,,,"yea, but you're not xyz" or "You should have Kid Rock do this or do that." Those things happen as we evolve, not on day one and sooner or later you have a Donald Trump talking about Drinks Americas or Kid Rock but we DO NOT control their domain, and I can't revert to spending time with little ripples when we are hitting the long ball eighty percent of the time. I love talking to my investors, keeping them abreast in my words on our progress, but there is a segment who don't understand , who just dont get it, who think that even if I could it makes sense to have Kid Rock do this, or Donald Trump do that,,,,,,when if I COULD I would not because in context it not only does not make sense, but it is not even the right thing to do within the prism of the world I operate in.
Someone will pay up a big dollar for this business and as the market continues to implode we stand to become more viable every day. I believe that that will pay off. But the group of investors that you speak to need to understand the movable and unmovable variables that are attached to this incredible trademark collection of value.
I hope this is of assistance in guiding your group. The fringe players and the Yahoo toll booth workers who blog between shifts said I wouldn't be here for two years now, the following quarter. I continue to build this out and when someone checks the inside of the envelope someday, it is going exactly according to plan.
Doing the work required to bring quality information to others: Rilo787, sneakypeaky, Tirunesh, BillyC49, Coopermun, OldTimer
I had some questions I wanted to get answered as I was unable to call in on this past CC. I want you to read the following response I received. Keep it close and maybe once a week, read it again. I won't tell you it is all the things I have been telling you over and over. If it doesn't make you want to own this stock, then I don't know what will. If it doesn't make you want to tell everyone you know about this opportunity then sadly you will miss every pot at the end of every rainbow. I love the reference to Vitamin Water, which was bought out for $4 billion, and of which the company just trademarked two names with the same 50 Cent.
Dear Mr. XXXXXXX,
There is so much bad information out there about the way we do business and why we are successful that I wanted to share with you some specifics as you speak to people about the various concerns they have as expressed in mindless blogging.
Perhaps as you have opened my eyes to the view of the market about securities, by sharing some of my world generically with you, just organizing the information in the public domain, we can somehow get at least some of those who follow the stock to separate the business from the trading of the stock and the assessment of the business so deeply rooted in what can only be called "wrong." None of what I am organizing here is confidential and certainly all of the information is available in the public domain. I would argue its more important how you organize the information that is being missed.
About the Value of Beverages:
1. The value of Drinks will ultimately be measured by the sum total of the value of the brands that comprise Drinks. Spirits transact at $1500-2000 per case. Beer depending on if there is a brewery at $100-500 per case and New Age Non Archaeology at the Sobe multiple of $14 or the Vitamin Water Multiple of $28.
2. Large global companies get to these premium multiples because they sit down and figure out what it will take to replicate what has been created and it is always more expensive.
3. Drinks is an IP company that is operating in the beverage field where there are superior multiples.
4. You can look at Seagrams' acquisition of Martel 20 years ago or Compari's acquisition of Cabo Wabo several months ago or with Grey Goose in between and the fact is the multiples hold up.
5. Bloggers say who cares and who would pay these multiples. The answer is No One, Until the Day they decide they will, then Every Company will seize on paying the multiples. We had a theoretical conversation with an large American, now Internationally owned beer company who before they were so rudely acquired, wanted to know if we would take $5 million for Rheingold. We dont sell a case we just own the trademark.
About the Drivers of Purchase/Acquisition:
1. Long Term sustainability is judged by global company managers who recognize that to compete and survive for more than a year means you are Superman. We have been moving the rock up the hill for four years.
2. Global Viability: When brands sell in more than the US that means when a true global company buys them they have legs in a legit business model. Bacardi has trouble selling Grey Goose in some International markets. My Trump Tie can be sold on any global street corner today with no marketing for north of $200 and in Manhattan or Michigan Ave no one would look at it. We are selling Trump in a lot of International markets and they are repeating orders. More about that later....
3. Cost of Expansion and Growth: No large company wants to buy a brand and do the heavy lifting. We spent what would be considered the Brooklyn budget to introduce our vodka in 46 states and 6 countries. No large company wants to spend to establish a trademark and they all fear what they buy may not exist. Most companies could not keep the lights on with what we have paid in marketing to build out 100,000 case intro.
SO WHAT IF?? no one buys you:
1. That was the good news for Constellation and Mr. Sands. He sold a product called Wild Irish Rose, flask wine for bums and various other products, then one by one, the products began to add up and before you know it, a multi-billion dollar enterprise came about.
2. If you thought there was no future in one of our products and it was only going to sell lets say 50,000 cases a year, and then you took and added the same moderate success to Dre, and Rock, and what we have in the pipeline, and before you know it the sum total of your failures is one of the largest mid-sized beverage companies in America.
3. If first you have one brand and then in no time you have five and six and more brands, critical mass comes very quickly.
4. "I don't see the product in my neighborhood location of xyz." That's the good news! If we were doing the case sales we are and it was everywhere, where is the upside? Where is the growth?
"THEY DON'T HAVE ENOUGH MONEY TO DEVELOP THE BRANDS THEY ARE TALKING ABOUT"
1. What money. We have a cognac, a sparkling vodka, a new international vodka, a prototype beer for rock. I have the labels, the bottles, the product, the partners. Does anyone think that with partners like Universal, Dre the perfectionist, Trump, Rock,,,,that they are perfectionist in everything but with our product development they just took a wild hairy assed flyer with us???? If everyone who had a cognac wanted the Dre Cognac, and every major company came to my door saying pick me, pick me,,,,,why would I pay for product development? I might interview for it, I might look at various options, but why pay,,,,the world wants to do business with us. Make me a good product, help me source it, give me some credit I might pick you. Refuse to do any one of these and off the list you go.
"THE BRANDS ARE NOT SELLING"
1. Perhaps the most maddening. On our website are the + 100 NYC retail accounts we do business in. There are hundreds of accounts we are doing business in and guess what ,,,,there are hundreds that we are not and that's the good news,,,,as there is more to sell. Not just when it is promoted but when no one is there and they simply sell it.
2. "Its not at (you fill in the blank)." Everyplace a brand is not that is viable and been around and is growing, and the more places the brand is not, the more upside the brand has.
"THEY DON'T HAVE THE MONEY TO EXECUTE THEIR PLAN"
1. Notice that all our Icons have media systems behind them. Dre, Universal, Rock. Top song on all charts last 8 months. These Icons have media machines that generate everything we had to get Trump to fit into. The management company that is partners on the cognac have 250 artists that will manage to have the cognac in their music videos in addition to the lead artist.
2. Notice that we have negotiated all our agreements to include credit from our new production partners.
3. Half the battle of selling a product is public awareness. Who did we miss?
FINALLY, "THE STOCK SYMBOL ISN'T EVERYWHERE"
Our relationship with the Icons of the world is unparalleled. The unfolding of the story and the simultaneous investment story is equally linear. We, with no IR company, got on more financial news blogs, magazines, on line and in the media with Kid Rock and or Dre than any 15 small cap companies you know. The irrational temptation is to say,,,,"yea, but you're not xyz" or "You should have Kid Rock do this or do that." Those things happen as we evolve, not on day one and sooner or later you have a Donald Trump talking about Drinks Americas or Kid Rock but we DO NOT control their domain, and I can't revert to spending time with little ripples when we are hitting the long ball eighty percent of the time. I love talking to my investors, keeping them abreast in my words on our progress, but there is a segment who don't understand , who just dont get it, who think that even if I could it makes sense to have Kid Rock do this, or Donald Trump do that,,,,,,when if I COULD I would not because in context it not only does not make sense, but it is not even the right thing to do within the prism of the world I operate in.
Someone will pay up a big dollar for this business and as the market continues to implode we stand to become more viable every day. I believe that that will pay off. But the group of investors that you speak to need to understand the movable and unmovable variables that are attached to this incredible trademark collection of value.
I hope this is of assistance in guiding your group. The fringe players and the Yahoo toll booth workers who blog between shifts said I wouldn't be here for two years now, the following quarter. I continue to build this out and when someone checks the inside of the envelope someday, it is going exactly according to plan.
Doing the work required to bring quality information to others: Rilo787, sneakypeaky, Tirunesh, BillyC49, Coopermun, OldTimer
Doing the work required to bring quality information to others: Rilo787, sneakypeaky, Tirunesh, BillyC49, Coopermun, OldTimer
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