thank you for the insight. i agree with you. i think everyone is coming to the realization now after the 4th turnaround attempt. this is a 90s brand with not a clue how to manage itself in 2014. not. a. clue. zero. clue. Cue's strategy of cutting expenses and trying to build sales will not result in any type of investable company. how could it? the soda costs more than most beer walmart sells and walmart is horrible fit for a premium soda brand. just silly in fact. is that the splurge item in walmart? you upgrade the soda to a goofy flavor with bipolycrapola artficial garbage in it? you buy the crappy ice cream to save money for the expensive soda? hardly. especially when the same 3.99 buys you a 12 pack of coke, pepsi, whatever. as for whole foods, jones has no cache for whole foods. it will not last there or will be a slow seller with a small shelf. you have shrinking sales here. cue is not dealing with growing the company with a lower overhead. she is dealing with lowering the expenses to make up for collapsing sales. nothing they are doing at this point will turn into some hot product. i dont believe they can point to a hot product they are offering. so why be in business? the gambler buys shares here going into season with the same conviction the gambler bets on 32 on the roulette wheel.
however, on the call they repeatedly said the quarter was isolated. since they were well aware of the sales for q1 already, i think you can take it as guidance that q1 is better.
i think there is some truth in that, but there is nothing special about 4th q results. i also think it is hard to cherry pick when you should have bought and sold based on hindsight. i do not think the leavings/firings signaled anything. however, with hindsight it is clear that chris reed was trying some slight of hand. i no longer trust him. slippery is the word. the meeting where they said to bury the 4q numbers in the hopes no one would notice, was a fateful meeting. but investors are a hopeful bunch and most public companies are wildly overvalued and tend to stay that way. so, i expect buying by gamblers. investors however have to be very wary of the slippery ceo who does not appear to understand much about the beverage market and how to grow a brand with investor money. the 8 year performance of the shares and sales tell a story. they should be doing far better with much better growth.
actually, he said it was not likely there would be dilution, but if a certain opportunity arose, then maybe. the possibility of dilution has nothing to do with the drop.
and still i really think you can buy the stock. however, the prospects have dimmed it is not a hansons type story. not a red bull. the management is not there for fast growth.
it has nothing to do with it. no one looks are fiscal year data. it was about a poor fourth quarter and poor guidance and poor management of key shareholders. hints at weakness in kombucha and a failure to delineate a reasonable business plan killed confidence in the company and chris reed for the near term. investors are hopeful by nature, but a lot of money left the stock. a lot of conviction left the room when chris essentially tried to pretent the quarter didnt happen. listen to the call. you can hear the disappointment.
essentially reed sounded like a kid starting a company from scratch. and that is not what people need to hear from a micro cap stock. once you sound pompous and self-satisfied, a lot of mature investors will walk away from you. once they heard that the company was cutting marketing, that meant slowing growth and a struggle to make a profit. you can not have both. hence the crash. it was clear he does not know what to do next. not in production, not in marketing, not in branding, not in product development. it was horrible.
the great, great failing here is the lack of an ability to generate income on these clients. after the last call it seems that a breakeven point or decent profit growth is years away.
you can not ignore the size of hanwa. that said they are not jumping in because jasper was making so much money. and a 1.5 million investment from hanwa is meaningful, but not significant to them.
well that is a big problem for jones offering cane sugar water as a "premium" beverage. they need to find people who want to drink pukeberry instead of cola. hence the collapsing sales, stock, etc.... omg if pepsi figures out how to make a photo label.
i agree it will trade higher. however, the major problem to me is that chris appeared dishonest. a slight of hand artist. unbelievable. unreliable. and these announcements of new accounts and distributors seem silly and a distraction. as chris said they are worth 1%. a joke when the brand should be growing 50% yoy. he does clearly does not understand the breach of trust. after all he is the president of the COKE of natural beverages. who can't turn a profit and is struggling to continue growth already. who must cut marketing costs to eak out a penny profit.
poor products, giant egos, no creativity, no effective marketing and falling sales. fire these people and bring in someone who understands business and products. seriously. is there actually a board here?
maybe something went wrong with lobby decorations?
you dont spend 250m to get 250m in revenue. you spend 10 million to get 100million.
its a freakin beverage company. it not that hard to figure out. its not biotech. you know how much harder it is to make and sell beer? 10 times harder. is there a shortage of beer brewers now? so why is he constantly trying to reinvent the wheel. look at the idiotic label and bottle problems. seriously. and the labels still suck. you dont innovate where no innovation is needed or required. why not invent a new cardboard for the four packs? why does the root beer come in a regular bottle with a regular label but the kombucha needed bizarre new design? and still the label sucks, the bottle is smaller and leaky. GT is laughing that the Coke of natural is gunning for them with a 1% market share and marketing budget that is being cut back. lol. oh that scared them. hey, boss, Reeds is cutting back on marketing expenses because their kombucha is losing money. brilliant. yet, its the most successful beverage launch their data consultants have ever seen.
this is when you bring in a professional who understands that unprofitable companies selling 40 million a year in beverages, dont refer to themselves as the Coke of anything.
cantor is on the shorts side at this point or neutral. they are clearly under-selling. any time you see a target of a few dollars above current price, it is not a buy. no one buys a stock hoping for 5%.
you are both wrong. jones now has the nicest lobby in the soda industry. read the business weak article. its about how weak business is, but there is good news. they are starting over as a money losing regional brand with declining sales. also the brand is still as cool as it was in the 1990s. artificial preservatives are still really cool.
that is not is really not the interesting part to me. where would you get 800,000 shares of mygn to buy within a dollar or so at this price in minutes? that would have to be more shorting. i do not believe they were real shares being offered by long holders looking to exit. what is another 40 million dollars when you are defending a 1.2 billion short position. so now imagine you add to this mix, goldman or blackrock or a major hedge fund flipping to long and issuing a $80 price target within a year or a buyout rumor. holy crap. the short defense would likely crumble and someone would make a nice payday. this is super interesting stuff. but again, the shorts held the line today.
it does not matter. the battle is over the $40 mark. if it breaches $40 with volume, all bets are off and it means shorts are feeling pressure to close out positions or bring in bigger money. this seems to be the wrong battle now for them. if a goldman came out with a strong buy and a $55 target, forget it. blood everywhere.
i actually think it is being set in motion. it make too much sense. someone will build a long position and yell fire in the theater. but so far the defense of $40 has been well handled. but mygn is not the vulnerable stock they thought it would be. i do not understand the reasoning in strengthening the short position. if it were me i would have exited that trade before a contrarian hedge fund decided to start a stampede.
will be apparent? huh? there already have been upgrades. it is random what the stock is predicted to be. the shorts will be protected at almost any cost here. so i expect more upgrade to a hold with a new raised target of $35. you are looking for a major player to flip the trade and call for a $50 target. so far all are playing ball with the shorts. at some point, someone big is going to decide there is little upside in maintaining the short here and they will reverse course. right now its a game of chicken and the shorts seem to throw down another hundred million today.
"Indeed, although the company has beaten earnings consistently, which has been part of our thesis, the consistently high short interest has been a large driver of the high stock price and detached the stock from fundamental valuation," he wrote.
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oh, we expected great earnings, but at a pe of 15 omg, its so expensive. the massive short position is the only reason its so high. you better sell. please god sell.
imagine if there had been massive buying on the long side without the short position. the stock would be so much lower. i am not sure how this doesnt constitute fraud. it baffles me. you have sec registered and licensed analysts coming out saying shit like this. regardless, until a power player on the street flips sides, mygn is stuck with the massive downward pressure.