I believe Musclepharm should have found some financing before it started announcing anymore big sponsorships....and it should have done so when it's stock price traded high last year. It didn't do anything, apart from buying back stock. This year, it got itself into a bank loan when it really hasn't demonstrated that it can be profitable yet.
Musclepharm has no obvious financing available to pay for any of this per their latest earnings report, meaning dilution is very likely coming.
For Musclepharm to function it needs probably $30 million in inventory at any time, which might actually not be enough to have enough money for unanticipated drops in demand like what happened in Q4....so, we might be talking about at least $10 million cash at any time as well.
Where are we now? Will so many different big sponsorships and endorsements pay off, as it becomes hard to capitalize on one deal over another, when you come from close to no sales relative to the size of the sponsorships.
Nike, Adidas, Puma and Pepsico got lots of cash and virtually no debt, selling in the billions of dollar each year.
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