For the past couple of years I have been hearing that CryoPort (OTCBB: CYRX) is not a "real" company because they don't have significant revenues. Well to those people I would say that no R&D company has significant revenues ... its part of being an R&D company. But those doubters can no longer (at least with an ounce of credibility) say that CryoPort is not the real deal.
Today's news on CryoPort validates a lot of what has been discussed about this company over the past couple of years. The primary issue facing CYRX is getting the story in front of people. I am not quite sure what CarpeDM is actually doing. I am fairly confident that they are not an IR firm and they don't seem to be much of a PR firm either. Anyone in this business should absolutely know that this type of news needs to include trading symbols in the release. Today it was Federal Express (NYSE: FDX) that was not included and it is the same problem that we had last week with the Quest Diagnostics (NYSE: DGX) release.
April 21, 2008: Federal Express Release
April 17, 2008: Quest Diagnostics Release
Here is the rub. Let's say that there are 500 people that are currently watching CryoPort very closely. They buy when the stock price dips, they read the news, etc. etc. When news like these 2 releases becomes public, this information needs to be in front of A LOT of investors, both retail and institutional. However, by only including the CYRX trading symbol in the releases, no new investors are hearing about the company. It is only being discussed by the investors who already know about the stock, and most of them already own it. Had the ticker symbols for FedEx and Quest been included into the last two releases, CYRX would have been in front of hundreds of thousands, if not millions, of new investors. When good news on a lightly followed stock is seen by hundreds of thousands of new investors, the typical follow through is NOT what we saw over the last couple of days.
Why is this so hard to figure out? An investor who communicates with me regularly recently contacted Stuart Fine at CarpeDM and was told that the newswires are the ones to call and confirm whether it is okay to include another company's symbol in the release and he didn't want to delay the news because they weren't sure how long it might take to get an answer.
First, the newswires only call if the other company's ticker symbol is actually put in the release when it is submitted. Second, if you don't ask for permission to include their trading symbol in the release that they have already approved, you can be assured that you are not going to get it. Rest assured that FedEx and Quest approved their company's name to be included in the headline of the release. As such, I seriously doubt they would object to including the ticker symbol in the body. This news is positive news for their companies (FedEx & Quest) and every public company likes positive press.
Note to Stuart Fine ... Unless you have a better way to get 1,000,000 new investors to read your press releases, how about let's at least ask if we can put the ticker in there. I don't care if it takes an extra week to get the approval, the type of exposure that the last two releases could have generated can simply not be purchased through promotional campaigns or marketing of any kind or any budget.
Okay, enough of that. Here is the facts that we know. They are partnered up with FedEx. They are shipping samples all over the globe for Quest Diagnostics. I have discussed that there has been a world class manufacturer at play here for a long time (going on 2 years now) and they want to get a piece in a big way - a million square feet facility. Does anyone think that this manufacturer is going to drop a couple hundred million to ramp up a facility of this size if there is not going to be a HUGE amount of volume being demanded?
When CryoPort will finalize that deal, I am not sure. I can tell you this though, I own a lot of stock and I am NOT SELLING A SINGLE SHARE.
You want to own "the next Microsoft" ... well, here is your chance. All of the forces that are out there are trying to keep this company out of the spotlight ... in a short time, they won't be able to.
DISCLOSURE: I worked with CryoPort from late 2004 thru August 2007. I assisted them in the process of becoming a public company in 2005 and I am pretty comfortable with the story. On my private equity side, both my clients, and myself personally, own stock in CryoPort and I also personally own some warrants. For the record, I am not consulting to them at this time and have not personally spoken with anyone in management about the status or operations of the company since the fall of 2007.
Monday, April 21, 2008
Friday, April 18, 2008
Update - OTCBB: CYRX (CryoPort)
Well, we are starting to see a dribbling out of news. Some of the news has been good, but some of it has been nothing short of amatuerish.
First, let's get the bad out of the way. The My Wallst page is nothing short of really bad. Really, really bad. NO public company should result to such low end tactics. I don't know who was responsible for this very poor move, but I would NEVER, EVER allow a client of mine to do such a ridiculous thing. Totally amatuerish and probably one of the absolute worst investor relations tools that I have ever witnessed.
The second set of less than stellar work that they did was not to include a ticker of Quest Diagnostics (NYSE: DGX) in their recent press releases. With the conservative stance that CryoPort has taken to date, it is obvious Quest Diagnostics is on board and I would bet that they even reviewed and approved the press release that included the Quest name in the header of the release. However, CryoPort lost a HUGE opportunity to get their stock in front of several hundred thousand investors by not including the Quest ticker in the release. If the Quest ticker is in the release, everyone who pulls up a quote for DGX would see the CryoPort news. While this requires the approval of Quest, I have confidence that this release received Quest's approval and I think it was just a poor job of public relations for not putting the ticker into the release. Period. End of story.
Now that I have aired what I think was done incorrectly, and those items are not insignificant, let's discuss what is going on that is good.
First, based on the recent release about Quest, I believe that my information has been confirmed and that the program described in a prior post was accurate. In a recent audio interview, the monologue that Peter Berry read to us included the term "partner with FedEx". This is the first time I have heard the company use the word "partnership" instead of "we will be shipping through FedEx". I was glad to hear Mr. Berry say "partner" because since the very beginning of the relationship, that has been the intention. I am also hearing word that the new partner site for FedEx clients to ship via CryoPort Express shippers will be up and running in the very near future. Possibly before the end of April, but I will be happy with May.
The next important piece of news that I am waiting on for confirmation of the various rumors out there is to hear that large-scale manufacturing has begun. When that occurs, the game is on. I heard a long time ago that the manufacturing firm was commiting A MILLION square feet. That seems to have been what a few others have heard as well. A million square feet is a lot of space and provides the location to produce several million shippers per month. At that rate, the numbers get VERY large.
Many people think that I am crazy when I start discussing CryoPort. "Trey has been drinking the CryoPort koolaid!" Well, maybe ... BUT, when this stock demonstrates that the company can ship a hundred million shippers each year around the globe, I think I'll trade in my koolaid for a Corona on the beach.
I don't want to wear this subject out as it will take its time to develop. The program is simply too big to just "turn on overnight". Big players involved. Legal teams to deal with at multiple Fortune 500 Companies.
If I get some helpful information in the interim, I'll keep you posted. Out.
DISCLOSURE: I worked with CryoPort from late 2004 thru August 2007. I assisted them in the process of becoming a public company in 2005 and I am pretty comfortable with the story. On my private equity side, both my clients, and myself personally, own stock in CryoPort and I also personally own some warrants. For the record, I am not consulting to them at this time and have not personally spoken with management about the status or operations of the company since the fall of 2007.
First, let's get the bad out of the way. The My Wallst page is nothing short of really bad. Really, really bad. NO public company should result to such low end tactics. I don't know who was responsible for this very poor move, but I would NEVER, EVER allow a client of mine to do such a ridiculous thing. Totally amatuerish and probably one of the absolute worst investor relations tools that I have ever witnessed.
The second set of less than stellar work that they did was not to include a ticker of Quest Diagnostics (NYSE: DGX) in their recent press releases. With the conservative stance that CryoPort has taken to date, it is obvious Quest Diagnostics is on board and I would bet that they even reviewed and approved the press release that included the Quest name in the header of the release. However, CryoPort lost a HUGE opportunity to get their stock in front of several hundred thousand investors by not including the Quest ticker in the release. If the Quest ticker is in the release, everyone who pulls up a quote for DGX would see the CryoPort news. While this requires the approval of Quest, I have confidence that this release received Quest's approval and I think it was just a poor job of public relations for not putting the ticker into the release. Period. End of story.
Now that I have aired what I think was done incorrectly, and those items are not insignificant, let's discuss what is going on that is good.
First, based on the recent release about Quest, I believe that my information has been confirmed and that the program described in a prior post was accurate. In a recent audio interview, the monologue that Peter Berry read to us included the term "partner with FedEx". This is the first time I have heard the company use the word "partnership" instead of "we will be shipping through FedEx". I was glad to hear Mr. Berry say "partner" because since the very beginning of the relationship, that has been the intention. I am also hearing word that the new partner site for FedEx clients to ship via CryoPort Express shippers will be up and running in the very near future. Possibly before the end of April, but I will be happy with May.
The next important piece of news that I am waiting on for confirmation of the various rumors out there is to hear that large-scale manufacturing has begun. When that occurs, the game is on. I heard a long time ago that the manufacturing firm was commiting A MILLION square feet. That seems to have been what a few others have heard as well. A million square feet is a lot of space and provides the location to produce several million shippers per month. At that rate, the numbers get VERY large.
Many people think that I am crazy when I start discussing CryoPort. "Trey has been drinking the CryoPort koolaid!" Well, maybe ... BUT, when this stock demonstrates that the company can ship a hundred million shippers each year around the globe, I think I'll trade in my koolaid for a Corona on the beach.
I don't want to wear this subject out as it will take its time to develop. The program is simply too big to just "turn on overnight". Big players involved. Legal teams to deal with at multiple Fortune 500 Companies.
If I get some helpful information in the interim, I'll keep you posted. Out.
DISCLOSURE: I worked with CryoPort from late 2004 thru August 2007. I assisted them in the process of becoming a public company in 2005 and I am pretty comfortable with the story. On my private equity side, both my clients, and myself personally, own stock in CryoPort and I also personally own some warrants. For the record, I am not consulting to them at this time and have not personally spoken with management about the status or operations of the company since the fall of 2007.
Wednesday, April 2, 2008
OTCBB: CYRX (CryoPort)
So the news is finally out about CryoPort starting "a pilot shipping program for a leading global diagnostic testing company". After a healthy delay, I presume not entirely at the desire of CryoPort, the news comes forth. Now for those who closely monitor CryoPort, this news is both long awaited, but somewhat anticlimactic.
What most of the investors that I have spoken with really want to know is "WHO" are the companies that CryoPort is doing business with? It is nice to say "a leading shipping company" (we learned later that it was FedEx), or a "leading global diagnostic testing company" (we learned later that it is ... ? )
There are posters on message boards that have thrown the name Quest Diagnositcs (NYSE: DGX) out there as a possible user of the CryoPort Express. Actually, I have also heard that name on several occassions, so in my opinion, where there is smoke, there might be fire. Hopefully the details will be forthcoming so we can know for sure.
In an effort to get ahead of the game, I have spoken with a number of people regarding Quest Diagnostics to try and determine a ballpark figure for the number of shipments that they are actually shipping. In my research, I have received similar numbers from two different sources that I believe to be reliable. From one source I heard an amount of "90,000 shipments every day of the year". From the other source, "over 32 million shipments per year". (For the math challenged out there, 90,000 x 365 = 32,850,000. So the numbers seem to be in line with each other.) Neither of these figures came to me directly from either company, so I have to keep some measure of doubt in there for now.
I have also heard, regardless of who the client is, that CryoPort will be controlling the entire process in this relationship. I have no idea as to how much of the 32 million shipments will eventually go through CryoPort, but I have "heard" (not confirmed by either company) that Quest would like move a large percentage of its shipping to the new shipping method if the pilot programs are successful. Now that might just be wishful thinking, but, if the other rumors out there on various sites and boards are accurate regarding the "million square foot European manufacturing facility", I would have to come to the conclusion that whatever the amount is, it is a LOT.
In my opinion, CryoPort is at the edge of something very big. There are not too many opportunities in an investor's lifetime to get into a company that can truly revolutionize an industry. Those types of opportunities are genuinely unique and make a difference in people's lives not just for a few years, but for generations to follow.
I think that we just might have one of those opportunities here with CryoPort.
DISCLOSURE: I worked with CryoPort from late 2004 thru August 2007. I assisted them in the process of becoming a public company in 2005 and I am pretty comfortable with the story. On my private equity side, both my clients, and myself personally, own stock in CryoPort and I also personally own some warrants. For the record, I am not consulting to them at this time and have not personally spoken with management about the status or operations of the company since the fall of 2007.
What most of the investors that I have spoken with really want to know is "WHO" are the companies that CryoPort is doing business with? It is nice to say "a leading shipping company" (we learned later that it was FedEx), or a "leading global diagnostic testing company" (we learned later that it is ... ? )
There are posters on message boards that have thrown the name Quest Diagnositcs (NYSE: DGX) out there as a possible user of the CryoPort Express. Actually, I have also heard that name on several occassions, so in my opinion, where there is smoke, there might be fire. Hopefully the details will be forthcoming so we can know for sure.
In an effort to get ahead of the game, I have spoken with a number of people regarding Quest Diagnostics to try and determine a ballpark figure for the number of shipments that they are actually shipping. In my research, I have received similar numbers from two different sources that I believe to be reliable. From one source I heard an amount of "90,000 shipments every day of the year". From the other source, "over 32 million shipments per year". (For the math challenged out there, 90,000 x 365 = 32,850,000. So the numbers seem to be in line with each other.) Neither of these figures came to me directly from either company, so I have to keep some measure of doubt in there for now.
I have also heard, regardless of who the client is, that CryoPort will be controlling the entire process in this relationship. I have no idea as to how much of the 32 million shipments will eventually go through CryoPort, but I have "heard" (not confirmed by either company) that Quest would like move a large percentage of its shipping to the new shipping method if the pilot programs are successful. Now that might just be wishful thinking, but, if the other rumors out there on various sites and boards are accurate regarding the "million square foot European manufacturing facility", I would have to come to the conclusion that whatever the amount is, it is a LOT.
In my opinion, CryoPort is at the edge of something very big. There are not too many opportunities in an investor's lifetime to get into a company that can truly revolutionize an industry. Those types of opportunities are genuinely unique and make a difference in people's lives not just for a few years, but for generations to follow.
I think that we just might have one of those opportunities here with CryoPort.
DISCLOSURE: I worked with CryoPort from late 2004 thru August 2007. I assisted them in the process of becoming a public company in 2005 and I am pretty comfortable with the story. On my private equity side, both my clients, and myself personally, own stock in CryoPort and I also personally own some warrants. For the record, I am not consulting to them at this time and have not personally spoken with management about the status or operations of the company since the fall of 2007.
Monday, March 24, 2008
What's in a deal? (OTCBB: NRDCQ / OTCPK: RDXH)
So Naturade is going to acquire all the assets and operations of Redux?
But Redux owns Naturade ... what is the purpose of this deal?
Redux has about 32.6 million total shares outstanding. Naturade, once the 1-for-6 reverse split is complete, will have about 32.8 million total shares outstanding. Redux owns about 30.2 of the 32.8 million shares in Naturade. When the assets go over to Naturade, Naturade will give shares of restricted stock to Redux as compensation. Once the restriction can be lifted from those shares (I expect it will be about 6 months), they will be distributed to Redux shareholders. Once the deal is complete, Naturade will be renamed "Redux Holdings" and Redux will become something else.
In a nutshell here is what I perceive as happening. For each share of RDXH that we own, we will receive 0.9251 shares of NRDCQ when it is distributed. Additionally, we will continue to own the existing shares of RDXH (and some additional shares of NRDCQ that are held there). I expect that NRDCQ will become competively priced with the current price of RDXH, split adjusted. Once they are roughly equivalents, they should theoretically "trade together" until the assets are over and the shares have been distributed.
Once all of the assets are distributed, the only thing left in Redux will be the NRDCQ restricted shares. Once those shares are distributed in about 6 months (my guess) then the current Redux corporate structure could be used for another company to become public as it will no longer have any assets.
Why do all of this? Well, here is my thoughts. Naturade has just been through bankruptcy and everything there is looking very bright as they have a cleaned up set of financials and they are profitable. Additionally, Naturade is a reporting company trading on the OTCBB. This method provides a swift move for Redux to become a reporting company to the SEC and get all of the corporate assets trading under a single public platform.
For me, as soon as NRDCQ (split adjusted) is within 15% of the value of RDXH, I like RDXH as the investment. Investors in RDXH will receive 0.9251 shares of NRDCQ, with some additional shares to follow when the restriction is lifted. Additionally, it provides a bit of "free diversification" opportunity as the remainder shares of RDXH will most likely be used in a future deal once the NRDCQ restricted shares have been distributed.
I am glad to see that Naturade is doing well. I am also glad to see that Redux Holdings is back on the warpath for acquistions. When I listen to Adam Michelin's interview at CEO Cast (March 24, 2008) I get the idea that Adam is working on some other deals.
I handle IR and Capital Markets Advisory issues for Redux Holdings and they recently authorized an updated Investor Brochure. In this document, Adam discusses a new acquistion target identified only as "Target R". This future component of Redux nearly doubles the top line revenue figure and is right in line of where Adam has historically called his "sweet spot" for deal flow ... companies with revenues in the $30-$50 million range.
Should be interesting to see what happens here as new investors become aware of these stocks. In my opinion, things are certainly pointing in the right direction.
DISCLOSURE: I am a large holder of Redux stock as I assisted Redux in becoming a public entity back in 2006. I continue to work with the Company on IR and Capital Markets Advisory issues and receive compensation for my services.
But Redux owns Naturade ... what is the purpose of this deal?
Redux has about 32.6 million total shares outstanding. Naturade, once the 1-for-6 reverse split is complete, will have about 32.8 million total shares outstanding. Redux owns about 30.2 of the 32.8 million shares in Naturade. When the assets go over to Naturade, Naturade will give shares of restricted stock to Redux as compensation. Once the restriction can be lifted from those shares (I expect it will be about 6 months), they will be distributed to Redux shareholders. Once the deal is complete, Naturade will be renamed "Redux Holdings" and Redux will become something else.
In a nutshell here is what I perceive as happening. For each share of RDXH that we own, we will receive 0.9251 shares of NRDCQ when it is distributed. Additionally, we will continue to own the existing shares of RDXH (and some additional shares of NRDCQ that are held there). I expect that NRDCQ will become competively priced with the current price of RDXH, split adjusted. Once they are roughly equivalents, they should theoretically "trade together" until the assets are over and the shares have been distributed.
Once all of the assets are distributed, the only thing left in Redux will be the NRDCQ restricted shares. Once those shares are distributed in about 6 months (my guess) then the current Redux corporate structure could be used for another company to become public as it will no longer have any assets.
Why do all of this? Well, here is my thoughts. Naturade has just been through bankruptcy and everything there is looking very bright as they have a cleaned up set of financials and they are profitable. Additionally, Naturade is a reporting company trading on the OTCBB. This method provides a swift move for Redux to become a reporting company to the SEC and get all of the corporate assets trading under a single public platform.
For me, as soon as NRDCQ (split adjusted) is within 15% of the value of RDXH, I like RDXH as the investment. Investors in RDXH will receive 0.9251 shares of NRDCQ, with some additional shares to follow when the restriction is lifted. Additionally, it provides a bit of "free diversification" opportunity as the remainder shares of RDXH will most likely be used in a future deal once the NRDCQ restricted shares have been distributed.
I am glad to see that Naturade is doing well. I am also glad to see that Redux Holdings is back on the warpath for acquistions. When I listen to Adam Michelin's interview at CEO Cast (March 24, 2008) I get the idea that Adam is working on some other deals.
I handle IR and Capital Markets Advisory issues for Redux Holdings and they recently authorized an updated Investor Brochure. In this document, Adam discusses a new acquistion target identified only as "Target R". This future component of Redux nearly doubles the top line revenue figure and is right in line of where Adam has historically called his "sweet spot" for deal flow ... companies with revenues in the $30-$50 million range.
Should be interesting to see what happens here as new investors become aware of these stocks. In my opinion, things are certainly pointing in the right direction.
DISCLOSURE: I am a large holder of Redux stock as I assisted Redux in becoming a public entity back in 2006. I continue to work with the Company on IR and Capital Markets Advisory issues and receive compensation for my services.
Friday, March 14, 2008
GWYI - Update
I recently spoke with Tim Consalvi over at Gateway International. Tim just released a letter to shareholders and posted it on their new corporate website. I have reposted the release on my First Capital Investors site as well for your review.
Tim has assured me that they are moving forward in their efforts re-file a Form 10SB with the SEC. While I don't think that the company is going to put a specific date out there for investors to look ahead to, based on the general tone of our conversation, I am "hopeful" that we will see a filing sooner than later, perhaps even by this summer. Gateway operates on a June 30 year end, so perhaps that will have an influence, although I am unsure at this juncture.
A Form 10SB filing would be a welcomed relief and I believe that the guys over at Gateway are genuinely good guys and are trying to do what is right by the shareholders. Tim assured me that he is pressing forward. Having had many face to face meetings with Tim, I believe him.
According to the new Gateway website, http://www.gih-inc.com/, Steve Kasprisin, is apparently still a Director with Gateway, so perhaps there is more to that story than I am aware of. Either way, since he is still an advisor to the company, I am confident that he is assisting in the transition to the new accounting system in whatever way he can. In the event that I jumped the gun on his departure to a new job in my earlier blog and was not accurate in my assessment of that situation, I apologize.
The shareholder report was interesting as it discussed an acquisition that occurred of which I was unaware. Gateway acquired CNC Repos for thier vendor and client base, as well as the existing management. I knew that they had been looking at that firm, but until I saw it in the letter to shareholders, I did not know that the acquisition had actually occurred. I am not sure at this point if CNC Repos was rolled into Elite Machine Tool Company or not, as the acquisition does not show up as a subsidiary under the "Companies" portion of the new site under the Machine and Tools Group section. If I get clarification on that I'll update later.
I think this is a positive step for Gateway as it gets them back on the acquisition roll-up track, which gives Gateway the potential to accelerate its growth beyond typical operation expansions. They have been excellent at doing this over the past 6 years. Had it not been for the acquisitions of Bechler Cams, Inc. and Nelson Engineering, Inc. - two deals that unfortunately did not work out - I think that the other acquisitions would have worked out much better. As it is they have still acquired Eran Engineering, ESK (rolled into Eran), All-American CNC Sales and now, CNC Repos. In their new facility, they certainly have the ability to acquire several more manufacturing firms and roll them right into the new footprint. By the way, I have visited the new facility on 2 occassions. It is very nice, well laid out, and offers HUGE opportunity for growth. Given that this company has average about 50% top end growth each year for the past 5-6 years, I have no reason to believe that they will not continue to keep that record in tact.
I will be keeping in contact with Gateway in the upcoming months and plan to keep a "finger on the pulse" to make sure they continue to move towards their relisting. At this time I am cautiously optimistic and hope that we will have this little gem back to trading publicly over the next quarter or two. For those who have contacted me over the past month and told me of your frustrations, just know that I am staying patient and ask the same from you and let's see if we are rewarded.
Stay tuned!
DISCLOSURE: I worked with Gateway as a Capital Markets Advisor and Investor Relations Consultant from 2003 thru December 31, 2007. However, while they remain a private, non-trading company, I am not under any type of contract at this time. Also for the record, as part of my Private Equity holdings, I own stock in Gateway International Holdings and have clients that own stock in the company as well.
Tim has assured me that they are moving forward in their efforts re-file a Form 10SB with the SEC. While I don't think that the company is going to put a specific date out there for investors to look ahead to, based on the general tone of our conversation, I am "hopeful" that we will see a filing sooner than later, perhaps even by this summer. Gateway operates on a June 30 year end, so perhaps that will have an influence, although I am unsure at this juncture.
A Form 10SB filing would be a welcomed relief and I believe that the guys over at Gateway are genuinely good guys and are trying to do what is right by the shareholders. Tim assured me that he is pressing forward. Having had many face to face meetings with Tim, I believe him.
According to the new Gateway website, http://www.gih-inc.com/, Steve Kasprisin, is apparently still a Director with Gateway, so perhaps there is more to that story than I am aware of. Either way, since he is still an advisor to the company, I am confident that he is assisting in the transition to the new accounting system in whatever way he can. In the event that I jumped the gun on his departure to a new job in my earlier blog and was not accurate in my assessment of that situation, I apologize.
The shareholder report was interesting as it discussed an acquisition that occurred of which I was unaware. Gateway acquired CNC Repos for thier vendor and client base, as well as the existing management. I knew that they had been looking at that firm, but until I saw it in the letter to shareholders, I did not know that the acquisition had actually occurred. I am not sure at this point if CNC Repos was rolled into Elite Machine Tool Company or not, as the acquisition does not show up as a subsidiary under the "Companies" portion of the new site under the Machine and Tools Group section. If I get clarification on that I'll update later.
I think this is a positive step for Gateway as it gets them back on the acquisition roll-up track, which gives Gateway the potential to accelerate its growth beyond typical operation expansions. They have been excellent at doing this over the past 6 years. Had it not been for the acquisitions of Bechler Cams, Inc. and Nelson Engineering, Inc. - two deals that unfortunately did not work out - I think that the other acquisitions would have worked out much better. As it is they have still acquired Eran Engineering, ESK (rolled into Eran), All-American CNC Sales and now, CNC Repos. In their new facility, they certainly have the ability to acquire several more manufacturing firms and roll them right into the new footprint. By the way, I have visited the new facility on 2 occassions. It is very nice, well laid out, and offers HUGE opportunity for growth. Given that this company has average about 50% top end growth each year for the past 5-6 years, I have no reason to believe that they will not continue to keep that record in tact.
I will be keeping in contact with Gateway in the upcoming months and plan to keep a "finger on the pulse" to make sure they continue to move towards their relisting. At this time I am cautiously optimistic and hope that we will have this little gem back to trading publicly over the next quarter or two. For those who have contacted me over the past month and told me of your frustrations, just know that I am staying patient and ask the same from you and let's see if we are rewarded.
Stay tuned!
DISCLOSURE: I worked with Gateway as a Capital Markets Advisor and Investor Relations Consultant from 2003 thru December 31, 2007. However, while they remain a private, non-trading company, I am not under any type of contract at this time. Also for the record, as part of my Private Equity holdings, I own stock in Gateway International Holdings and have clients that own stock in the company as well.
Monday, March 3, 2008
Big Banks: Time to Buy?
I was at a venture capital summit in January where a banking analysts suggested that historically banks are a screaming buy when they can be purchased for less than book value. I tend to agree with that assessment, however, when the book value is constantly being reduced due to significant write-downs as a result of the subprime mess, that theory gets a little muddy.
Now that I have convinced you that banks are not worth looking at due to unknowns, let me confuse you even more by stating that I am starting to think the major risks are out there and the upside is getting better every day. Are we still in a slumping housing market that continues to leave unexposed risk the the investor? Yes. Are we staring a possible recession in the face that could cause things to worsen even more? Yes. Is the sky falling? No.
One thing that most investors would agree on is that banks are in the money business. They are some of the leading experts on how to turn a profit. When the opportunity exists to purchase leading banking instutions at nearly 50% discounts, while raking in 6%-8% dividend yields, smart money gets in and expects to go on a bumpy ride.
My top TWO: Bank of America (NYSE: BAC) and Wachovia (NYSE: WB).
BAC is strategically positioned to do better than their peers once the current cycle of real estate debacle and "flipper depression" is over. They are buying Countrywide on the cheap and in a few years BAC shareholders will reap the benefits. Getting paid 6.2% to ride the storm is not a bad way to spend a couple of years. The stock WILL be higher in the next 24-36 months.
WB is one of my favorite bank stocks. They are well managed, they did a fair job in keeping the Wachovia culture by dropping the First Union baggage to a large degree. Perhaps most intriguing, they currently pay an 8% dividend, so I get paid well while I wait.
There might be more negatives to come in this sector, but neither of these banks is going to go out of business and both should be stronger than their peers when the storm passes.
DISCLAIMER: I have no relationships with either of these banks in any capacity except as a customer and shareholder.
Now that I have convinced you that banks are not worth looking at due to unknowns, let me confuse you even more by stating that I am starting to think the major risks are out there and the upside is getting better every day. Are we still in a slumping housing market that continues to leave unexposed risk the the investor? Yes. Are we staring a possible recession in the face that could cause things to worsen even more? Yes. Is the sky falling? No.
One thing that most investors would agree on is that banks are in the money business. They are some of the leading experts on how to turn a profit. When the opportunity exists to purchase leading banking instutions at nearly 50% discounts, while raking in 6%-8% dividend yields, smart money gets in and expects to go on a bumpy ride.
My top TWO: Bank of America (NYSE: BAC) and Wachovia (NYSE: WB).
BAC is strategically positioned to do better than their peers once the current cycle of real estate debacle and "flipper depression" is over. They are buying Countrywide on the cheap and in a few years BAC shareholders will reap the benefits. Getting paid 6.2% to ride the storm is not a bad way to spend a couple of years. The stock WILL be higher in the next 24-36 months.
WB is one of my favorite bank stocks. They are well managed, they did a fair job in keeping the Wachovia culture by dropping the First Union baggage to a large degree. Perhaps most intriguing, they currently pay an 8% dividend, so I get paid well while I wait.
There might be more negatives to come in this sector, but neither of these banks is going to go out of business and both should be stronger than their peers when the storm passes.
DISCLAIMER: I have no relationships with either of these banks in any capacity except as a customer and shareholder.
Monday, February 25, 2008
(OTCPK: RDXH) Redux Holdings
Redux Holdings announced today that they have acquired the remaining shares of Koloseum Nutritional Sciences ("KNS") that they didn't already own. (FYI: they owned 30% before today's announcement.) This has obviously been in the works for a while as the owners of KNS, Rick Robinette and Milos Sarcev, have been part of the Naturade team for many months now as Chief Operating Officer and Chief Science Officer, respectively.
So what does this transaction really mean? Is it important?
Well, here is what I think it does for the Company. First, it provides a new product line to market alongside the Naturade brand to a large network that is already in place. Naturade is in stores all across the United States (as well as some international locations) like grocery stores, natural food stores, Sam's Clubs, vitamin stores and many more. The Naturade brand typically targets the mass audience (moms and pops of the world).
The KNS line targets athletes.
Why does it matter? Well, is there a more efficient way to introduce leading edge, proprietary, nutritional formulas into your "everyday" product line than to take it from a sister product line that already produces supplements for world class athletes?
I have met with both Rick Robinette and Milos Sarcev and believe they are both savvy businessmen. Rick is a marketing guy with many industry credits to his name. He has been around the industry for about 20 years and is well connected with buyers (these are the people that work for the retailers and represent the contact point that you want to know in order to get your products the required shelf space.)
Milos Sarcev has been quoted by top fitness magazine editors (FLEX Magizine) as having one of the best minds of our age regarding health and nutrition and how it relates to developing the body. Milos was the 1989 Mr. Universe and has an incredible ability to train high end (mostly professional) athletes and maximize their performance. Now that KNS will be available on a wider distribution, athletes around the globe will be able to get the benefits of Milos’ most advanced nutritional formulas.
Now that Naturade has exited bankruptcy and appears to be on sound footing financially, I am looking forward to seeing how that Company grows its distribution network. Adding KNS to the mix should add another quality product to the offering and should be a step in the right direction.
DISCLOSURE: I am a large holder of Redux stock as I assisted Redux in becoming a public entity back in 2006. I continue to work with the Company on IR and Capital Markets Advisory issues and receive compensation for my services.
So what does this transaction really mean? Is it important?
Well, here is what I think it does for the Company. First, it provides a new product line to market alongside the Naturade brand to a large network that is already in place. Naturade is in stores all across the United States (as well as some international locations) like grocery stores, natural food stores, Sam's Clubs, vitamin stores and many more. The Naturade brand typically targets the mass audience (moms and pops of the world).
The KNS line targets athletes.
Why does it matter? Well, is there a more efficient way to introduce leading edge, proprietary, nutritional formulas into your "everyday" product line than to take it from a sister product line that already produces supplements for world class athletes?
I have met with both Rick Robinette and Milos Sarcev and believe they are both savvy businessmen. Rick is a marketing guy with many industry credits to his name. He has been around the industry for about 20 years and is well connected with buyers (these are the people that work for the retailers and represent the contact point that you want to know in order to get your products the required shelf space.)
Milos Sarcev has been quoted by top fitness magazine editors (FLEX Magizine) as having one of the best minds of our age regarding health and nutrition and how it relates to developing the body. Milos was the 1989 Mr. Universe and has an incredible ability to train high end (mostly professional) athletes and maximize their performance. Now that KNS will be available on a wider distribution, athletes around the globe will be able to get the benefits of Milos’ most advanced nutritional formulas.
Now that Naturade has exited bankruptcy and appears to be on sound footing financially, I am looking forward to seeing how that Company grows its distribution network. Adding KNS to the mix should add another quality product to the offering and should be a step in the right direction.
DISCLOSURE: I am a large holder of Redux stock as I assisted Redux in becoming a public entity back in 2006. I continue to work with the Company on IR and Capital Markets Advisory issues and receive compensation for my services.
Wednesday, February 13, 2008
OTCBB: CYRX - In the news?
Now I don't typically put a lot of credence in what is posted on chat boards; however, a year or so ago I was made aware of a large manufacturing firm in the dry ice space that wanted a piece of the action over at CryoPort. At that time I heard that the manufacturing firm was willing to commit a million sq ft of floor space to ramp up the large scale production of the CryoPort Express One-Way Shipper.
Today on http://www.icecoldstocks.com/, the Iceman made a quick "whisper" comment during his "Dollar Man" podcast about possible news of a European manufacturer that was earmarking up to a million square feet to work with CryoPort. Now I don't know if it is the same manufacturing firm, I would bet that it is, and I don't know when the deal will become public, if there is one. But ... I do know that if a billion dollar manufacturing firm is dedicating a million square feet of their floorspace to support the CryoPort Express One-Way Shipper, they are not doing it for free and they expect to do A LOT of shippers. A million square feet is an enormous facility, which has a large carrying cost. If this "whisper" by the Iceman comes to fruition, I would expect things over at CryoPort to start picking up pace very rapidly.
Dollar Man Commentary: HERE (Audio: CYRX at the very end.)
Whisper Page: HERE (Text: CYRX is at the top.)
I really don't think that many investors have really put together a vision for their CYRX shares in regards to future valuation. Well, just take some very ballpark figures for example. There have been "rumors" on internet boards that FedEx ships over 300 million frozen packages on a global basis each year. If CryoPort were to ship 100 million shippers each year at an average of say, $80 per shipper (including shipping costs), they would do $8 billion (that's billion with a "B") in revenues. They would have to account for cost of manufacturing, shipping and corporate expenses. While I think they have better margins, let's assume that they can make 8% net profit based on the top end revenue line, they would make $640,000,000 in earnings. Currently, on a fully diluted and converted basis, they would have about 55-60 million shares outstanding.
You do the math.
DISCLOSURE: I worked with CryoPort from mid 2004 thru August 2007. I assisted them in becoming a public company and I am pretty comfortable with the story. On my private equity side, I own stock and warrants in CryoPort. I have not sold any stock to date and don't intend to sell any stock anywhere remotely close to the current price. I might look to sell a few shares over $10. For the record, I am not working with them in any capacity at this time.
Today on http://www.icecoldstocks.com/, the Iceman made a quick "whisper" comment during his "Dollar Man" podcast about possible news of a European manufacturer that was earmarking up to a million square feet to work with CryoPort. Now I don't know if it is the same manufacturing firm, I would bet that it is, and I don't know when the deal will become public, if there is one. But ... I do know that if a billion dollar manufacturing firm is dedicating a million square feet of their floorspace to support the CryoPort Express One-Way Shipper, they are not doing it for free and they expect to do A LOT of shippers. A million square feet is an enormous facility, which has a large carrying cost. If this "whisper" by the Iceman comes to fruition, I would expect things over at CryoPort to start picking up pace very rapidly.
Dollar Man Commentary: HERE (Audio: CYRX at the very end.)
Whisper Page: HERE (Text: CYRX is at the top.)
I really don't think that many investors have really put together a vision for their CYRX shares in regards to future valuation. Well, just take some very ballpark figures for example. There have been "rumors" on internet boards that FedEx ships over 300 million frozen packages on a global basis each year. If CryoPort were to ship 100 million shippers each year at an average of say, $80 per shipper (including shipping costs), they would do $8 billion (that's billion with a "B") in revenues. They would have to account for cost of manufacturing, shipping and corporate expenses. While I think they have better margins, let's assume that they can make 8% net profit based on the top end revenue line, they would make $640,000,000 in earnings. Currently, on a fully diluted and converted basis, they would have about 55-60 million shares outstanding.
You do the math.
DISCLOSURE: I worked with CryoPort from mid 2004 thru August 2007. I assisted them in becoming a public company and I am pretty comfortable with the story. On my private equity side, I own stock and warrants in CryoPort. I have not sold any stock to date and don't intend to sell any stock anywhere remotely close to the current price. I might look to sell a few shares over $10. For the record, I am not working with them in any capacity at this time.
Friday, February 1, 2008
(OTC: RDXH) Redux Holdings, Inc.
Redux Holdings, Inc. (Quote: RDXH) is a stock that is not really on anyone's radar at the present time. In a nutshell, Redux goes out and acquires distressed companies and/or cherry picks assets from distressed companies that private equity firms, hedge funds, mutual funds, venture capitalists, etc. would like to get rid of. The management team at Redux is an experienced group of industry veterans comprised of members of Enterprise Solutions Group (http://www.eginc.net) and others. The team is experienced in M&A plays of financially or operationally distressed companies and has handled companies ranging from millions to billions.
Just a heads up: An interesting article about Redux Holdings is currently on the front page of the current Los Angeles Business Journal titled: Company Spinning Turnaround Process.
In 2005, Adam Michelin, Redux's CEO, asked me if I would be interested in assisting him in building a publicly traded M&A firm that would focus on turnaround scenarios in leveraged transactions. I told him that I might, it would just depend on the deal. After doing a little more due diligence on Adam, I realized that he was a well established, well connected and well respected player in the distressed company turnaround industry. I agreed to move forward on the project and Redux Holdings was the result of these joint efforts.
For those who are wondering what the name Redux means, according to a Latin translation (freely available on the internet): Redux - ducis adj.: act. [bringing back , restoring]; pass. [brought back, returned].
My definition: “Rebirth”: ie: rebirth of an asset; taking an asset that was mismanaged or which failed for a specific reason and isolating and repairing the deficiency while returning the asset to its full potential value.
The root name is a proper description of what the company does with selected “orphaned assets” and distressed corporations. Redux identifies the valuable assets that are part of a poorly run operation, strips them out and isolates them in a new entity, brings in the necessary management and capital to fix any outstanding issues and returns the asset to profitability.
The primary objective for Redux Holdings is to identify potentially beneficial assets, acquire them at deeply discounted prices, and quickly restore them to profitable operations. The firm focuses on primary areas in which it intends to maintain a long term presence, called Permanent Core Groups. Currently, the core groups consist of:
1.) Consumer Services
2.) Nutrition and Supplements
3.) Technology
I won't go into great detail on my blog since I have an Investor Fact Sheet available on my website that can be downloaded free of charge. The fact sheet gives a much more in-depth overview of the pieces that are currently in the Redux portfolio. I am presently working on updating this for the Company, but this somewhat dated version still provides a pretty accurate picture and gives a good overall review.
I am currently discussing Redux with a number of accredited investors on my private equity side and I believe that Redux is on the right track. Redux bought the majority ownership of Naturade (Quote: NRDCQ) in August 2006. (Not sure why they have not dropped the “Q”, but getting that resolved is in process.) Anyway, Naturade had been cash flow negative for 5 years prior to Redux taking control. In November 2007, Naturade came out of bankruptcy and was recently put back on the OTCBB (See January 18, 2008: 8k filing). Although I am not sure of the method that will be used to implement a filing, I expect that Redux will become OTCBB in the near future as well.
DISCLOSURE: I helped this company to become public, I own stock in the company and I am a compensated consultant to the company for IR and Capital Markets Advisory.
Additional note: The float on this company is very small, I own a bunch of shares and there is not much stock available for trading. When it does start trading, I expect it will be tough to find stock to buy, but that is okay with me, since I already own my shares. :)
Just a heads up: An interesting article about Redux Holdings is currently on the front page of the current Los Angeles Business Journal titled: Company Spinning Turnaround Process.
In 2005, Adam Michelin, Redux's CEO, asked me if I would be interested in assisting him in building a publicly traded M&A firm that would focus on turnaround scenarios in leveraged transactions. I told him that I might, it would just depend on the deal. After doing a little more due diligence on Adam, I realized that he was a well established, well connected and well respected player in the distressed company turnaround industry. I agreed to move forward on the project and Redux Holdings was the result of these joint efforts.
For those who are wondering what the name Redux means, according to a Latin translation (freely available on the internet): Redux - ducis adj.: act. [bringing back , restoring]; pass. [brought back, returned].
My definition: “Rebirth”: ie: rebirth of an asset; taking an asset that was mismanaged or which failed for a specific reason and isolating and repairing the deficiency while returning the asset to its full potential value.
The root name is a proper description of what the company does with selected “orphaned assets” and distressed corporations. Redux identifies the valuable assets that are part of a poorly run operation, strips them out and isolates them in a new entity, brings in the necessary management and capital to fix any outstanding issues and returns the asset to profitability.
The primary objective for Redux Holdings is to identify potentially beneficial assets, acquire them at deeply discounted prices, and quickly restore them to profitable operations. The firm focuses on primary areas in which it intends to maintain a long term presence, called Permanent Core Groups. Currently, the core groups consist of:
1.) Consumer Services
2.) Nutrition and Supplements
3.) Technology
I won't go into great detail on my blog since I have an Investor Fact Sheet available on my website that can be downloaded free of charge. The fact sheet gives a much more in-depth overview of the pieces that are currently in the Redux portfolio. I am presently working on updating this for the Company, but this somewhat dated version still provides a pretty accurate picture and gives a good overall review.
I am currently discussing Redux with a number of accredited investors on my private equity side and I believe that Redux is on the right track. Redux bought the majority ownership of Naturade (Quote: NRDCQ) in August 2006. (Not sure why they have not dropped the “Q”, but getting that resolved is in process.) Anyway, Naturade had been cash flow negative for 5 years prior to Redux taking control. In November 2007, Naturade came out of bankruptcy and was recently put back on the OTCBB (See January 18, 2008: 8k filing). Although I am not sure of the method that will be used to implement a filing, I expect that Redux will become OTCBB in the near future as well.
DISCLOSURE: I helped this company to become public, I own stock in the company and I am a compensated consultant to the company for IR and Capital Markets Advisory.
Additional note: The float on this company is very small, I own a bunch of shares and there is not much stock available for trading. When it does start trading, I expect it will be tough to find stock to buy, but that is okay with me, since I already own my shares. :)
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