MB: It wasn't hard to do well in the Breeders' Cup. All you had to do was bet on the horses that wore the new nasal strip. Three long shot winners: Cash Run, Anees, and Cat Thief all won with it and, if I am not mistaken, the absurdly high odds Golden Missile, who came in 3rd in the Classic, appeared to have one on as well. Surfside, which came in 3rd in the Juvenile, was another nasal strip user.
For those interested (disclaimer: I have been very long for the last month since the product was announced) the producer of the product is CNS, Inc., of Minneapolis (CNXS $7 3/16) which is mainly known for Breathe Right Nasal Strips for humans, used in sports (a lot of the jockeys were using one) and to reduce snoring (it works great for some people, not at all for others.)
The ones for horses sell for $10 each and can only be used be used once. Patent protection is strong. They cost the company squat to make, and after the Breeders Cup results, I don't think CNXS is going to have to work too hard to sell them.
Although they are effectively a performance enhancer in some horses, what they really do is let the horse get more oxygen into the lungs, which protects against the internal bleeding, a serious problem for which the only supposed preventative has been a shot of Lasix, which everyone agrees doesn't help much for that problem. In other words, the nasal strip is good for the health of the horses, so racing commissions will all eventually approve it, because they have to pretend they care about the horses.
The potential market, if you add in trotters, polo ponies, event horses, etc. could be more than 5 million strips per year. CNXS has under 15 million shares outstanding, so the EPS effect could be very large, and it has over $3/share in cash and no debt. |
