Spartak, Not disclosed in any report are variable costs broken out to produce, sell and distribute Rheingold. When you find them, post them.
I am focused on Rheingold only, and that's all I care about. There is a breakeven point when Rheingold will contribute net income to the company. I believe it is a completely unreasonable assumption that the Rheingold business model did not include a product breakeven point.
By sub-contracting production and distribution, DKAM has the freedom to sell each case at a wholesale gross profit, less Rheingold's selling, marketing and advertising expenses.
If you are in the business of selling print materials but cannot afford to build-out a print shop, you sub-contract out the printing, and make the difference between your cost and your sales point. From that gross profit all other expenses must be paid.
Assuming salaries associated with Rheingold remain unchanged, DKAM's loss will narrow with every case of Rheingold it sells when it exceeds Rheingold's selling, marketing and advertising expenses.
That's why I care about the marketing plans to support retailers, their re-orders, the overall number of distributors who are responsible for "pushing" the product into retail stores, and thus Revenue.
The trend of increasing revenues and decreasing losses will encourage investors who have to then calculate how long it will take to turn a profit, and how much dilution they will have to bare to reach the company's breakeven point.
Long before that point, as revenues increase, DKAM will become a "Traders" delight because increasing revenues are like a pretty girl on a bar stool.
Spartak Share Friday, February 18, 2011 11:25:31 AM
Re: Spartak post# 57080 Post # of 57081
Let's say they have 100M O/S and can print 400M more. Obviously PK can't sell all 400M at 0.0045. So assuming he'll be selling on the go, based on needs the price will be declining proportionately to the amount of shares sold. If ~50M shares brought the stock down from 0.04 to 0.0045 then 400M will bring it down from 0.0045 to 0.0005. Heck even if PK misteriously would be able to deceive shareholders to buy all of his O/S at let's say 0.002 he'd be able to raise only 800K, not enough to cover last quarter's losses. Yet longs continue to analyse roll out of negative margin beer and continue to drink cool a... err rheingold :)
