Saturday, October 20, 2012 10:05:43 PM
This downward slide will gain momentum exponentially the closer it gets to trip zeros. Salvage selling will be the norm causing a rapid decline.
We have just had two significant news releases
[1] Sherwood Distributors
[2] Subsidiary in NY
and the the PPS, after a brief climb into the mid 7's, quickly returned to the door step of the 5's. It is pretty clear that down is the direction, and "buying cheapies" in the double zeros will not stop this slide.
Will a commercial make that big of a difference? I doubt it. I don't view a commercial in S.C to be as significant as the aforementioned news releases and they certainly did not stop this downward trend. We were told that audited financials would not be coming anytime soon. That's out. We will/might see some hand scratched notes (aka unaudited financials), but that's not going to make a difference since the OS total represents the biggest obstacle.
As I see it, you either plan to ride this to the basement at which time we will see a buy-back (as promised) before the PPS starts a new climb. Or, you sell off and salvage what you can (or hopefully take some profit albeit smaller than anticipated) if other opportunities look more promising at this time.
We cannot have both scenarios: a great upward ride and a huge OS total. The OS total must be significantly reduced. That means a ride to the basement and a re-launch. Some feel an incremental buy-back is happening or could happen. Mathematically, that seems like a very poor option by a company that is desperately trying to expand distribution and sales. Those costs trump a buy-back at these present share prices. Some have ventured a guess that a well timed R/S would be a very prudent manuever. Mathematically, that is absolutely true. It does contradict the buy-back promise thus creating an immediate air of distrust. Plus, others have stated that post R/S successes have been few in number. That is most certainly on the minds of BBDA.
Could I be wrong about all of this? Absolutely. Either way, as I see it, everyone has a choice to make, and trip zeros appear to be getting closer with each passing week.
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