I sent this email to my son-in-law last night regarding the big3 stocks and another biotech stock in which I invest. I have copied and pasted just the part on the email dealing with XXII and my expectations for upcoming developments:
As to XXII, I foresee them getting their MSA approval to mfr cigarettes at the new facility in NC maybe as early as this week or the following week at the latest. This is a given since all processes for approval were successfully completed after the successful inspection of the NC facility Nov 5.
I see them immediately submitting an up listing request to either/both NYSE and NASDQ and an approval by the end of the Q1 2014. The up listing is a rock solid done deal due to their current large cash holdings with no debt and no overhanging warrants. The warrant issue was resolved 12 Dec. when 93% were converted.
I see them announcing a major USA distribution agreement in mid to late January for our super premium cigarettes (agreements only waiting for the MSA approval at this time IMO), maybe some worldwide regional agreements (say with India Tobacco or whoever is the major distributor In Indonesia, maybe someone in the Middle East, N Africa, S America, etc), and a super fast roll out of Brand B being sold worldwide.
In conjunction with the up listing approval, XXII will realize they do not have the liquidity in stock to satisfy the institutional demand as almost the whole float IMO is owned by mgt or subscribers to HTFBS. As such, they will do a forward split of 2 or 3 to 1 and after up listing I see the stock price going back to pre-split levels in a very short time. Thus, what qty of shares is owned by the end of Jan by each stockholder should multiply by the size of the forward split.
XXII IS MY FOUNDATION, MY BASE FOR MY FUTURE FINANCIAL WELL BEING with my speculative investment funds. All other stocks are simply icing on the cake. I will be blunt in that I see NO CONS for XXII at this time and see the risk in this stock as next to negligible.
The pros I see are as follows:
1)Massive market - Each 1% market share of USA or .1% worldwide market should increase market cap $1B Combine the size of the market with the percentage of the market our IP should allow us (or our partners who will be paying us a royalty on all sales) to dominate a LARGE WORLDWIDE percentage in my estimation. Say we only get 10% of the worldwide market. That is $100BILLION market cap. What other stocks will be able to command that size of potential market cap or generate the resulting massive revenues per year?
2)Massive profit – When XXII starts really ramping up production, they will be able to increase facilities for next to nothing and with extremely small increase in employees. They won’t have to spend a lot in R&D as they already own the IP to protect their market share, they won’t have to come out with product redesign every year, and that is why the tobacco industry is one of the highest profit industries in the world.
3)Massive dividends - Tobacco companies have historically given back 80%+ of earnings in dividends while the S&P500 is around 8%. If we get a forward split of just 2 for 1 sometime in the next few months as I expect, my current xxx shares will go to xxx and all I need is a yearly dividend of $2 per share to see a xxx K/year dividend check coming my way with no sale of any stock. I look at the current large tobacco companies and they have many extraneous companies dragging down on their dividends and need for cash. XXII is a stripped to the bone, tobacco only company and with the very large market share I expect their IP to command and their low cost operating figures I think their dividends should make the major competitive tobacco companies dividends look puny in a relatively short period of time. Thus, I say $2 per share dividends but it could get crazy big.
4) IP locked up with patents so we have long term market advantage.
5) XXII is smart enough to partner with the Chinese State owned tobacco company and that alone will bring in revenues other large competitors have not been able to bring about. Our growth in the world market will take everyone by surprise due to this factor alone. The sleeping dragon will become our very good friend.
6) Mgt - Our team is professional, experienced, and not fat cats sucking the life out of small stockholders. The greatest point is they are the largest stockholders so what is good for them only helps the cause of all other small stockholders. Add in the RJR ex-Pres and Prod. Dev. Mgr who are joining the team from the NASCO acquisition and the recent addition to the BOD of the ex-Pres of Santa Fe Natural Cigarettes who also happens to sit on the board of RJ Reynolds Tobacco and we can expect MAJOR MAJOR bidding wars for our IP and products from the largest of our competitors.
As I read the above, it makes me wonder why I even toy with other stocks. The only reason I can come up with is the need for diversity.
As investors with XXII, we are sitting in a very enviable position, especially if we already have our boats filled with stock.
AI
