They seem to have no leverage with increasing sales. Profit swing only $400K over one year with 20% uptick. We would not be profitable for 2 more years at this rate. EBITDA only $1MM so we are selling at 50x EBITDA in a 10 times universe. They are developing me too products because the base business is not growing--the shelf is full. The gross margin is so much lower than others that leverage does not work. They really need to rethink the business model. With the stock this high, they should be buying the comp and leverage production and size. Don't think they have mentality or ability to do this. Too bad. Maybe we will get lucky and they come up with something new like Monster did. Unfortunately luck is not an investment strategy.
I used to get all worked up when analyst112 posted negative comments (do some searching and you'll see bearish posts when the stock was under $1.20). Then I realized that everytime he (or she) posts, the stock price goes up. So keep on posting analyst112!!
Must be unique to REEDs only - a company investing for sales growth. How long can a company spin this? You think the market price of stock being practically at the same level since IPO in 2006 (where 2m shares were offered @ 4 and now almost 10m shares outstanding outside of Reed family)....is because sales have not been growing? Sales have grown w/ debt and # of shares outstanding....but not a single profitable year since public co. in 2006. Why is the stock -50% from high...sales went +20% last yr? Why is the stock down this year and also today? with the conference call over and great things in store for 2013 revenue growth...investors should be buying it w/ both fist...after all label-gate is sunk cost, inventory loss was eaten up in q4.
For CR profit is not a priority and he already stated how he is going to SPEND new found gross margins. Top 3 guys took home $600k in 2012..maybe they should have taken a pay cut.
CR's strategy is to find a greater fool to sell the company in 5-7 years...that does not sound like a CEO who wants to build a sustainable profitable entity that can last for decades.
Stock has lost about $5m mkt cap today and about $45m mkt cap since peak...w/ those kinda numbers...he could have used the stock to buy a buch of established regional kambucha names ...just like he picked up Virgil...but no..REED now has fancy curved glass K bottle w/ lousy labels and the worst part...one can hardly read them....
Transcript of cc - CR: ...So look to see more earnings, but don’t look to be the focus on this company to be earnings. Its gong to be to create shareholder value whether the stock follows that or not.
Think about it....CR thinks profit/net income is not important, Wall street is not valuing the company correctly...how is he creating shareholder value? Stock is practically in the same place as 2006 IPO price of $4....isnt 6 year since IPO, then PIPES, preferred A and B, Debt - all this not enough to create shareholder value....he comes to the marke for money...but then screws investors by not creating value...for the investor the stock price is the way to benefit...and if stock does not follow its cause there is no earnings...6 years and not a single profitable year...ntw Hansen was profitable before its plunge into Monster energy drink.