I looked over the information you highlighted and really do not find a compelling reason for not being long. This is a BB stock and its SEC filing looks as scary as many other BB stocks. There is potential here for SMKE to perform but as I stated before, I happen to like CIG a little bit better.
With 30,000,000 shares of which only CLASS A was offered to the general public (~5.5 million shares), the CLASS B stock holders control 97% of the company. 1 Class B share has 10x the voting power of the Class A share holders. The head of the snake at CIG is Ron Pereleman. This company is ruled with a very tight fist. No more discussion here or it will look like a "pick"<G>.
Finally, even though I do not see a compelling reason to be long (especially since I like CIG as an alternative), I do not see anything that would suggest gambling on shorting this stock either. My opinion on SMKE is a polite pass on it as an investment at this moment. I would wait to see how successful their manufacturing expansion is over the next months.
BTW-key comment made in the filing was the belief there is an inherent inability of anyone to meet the market demand for premium cigars. If this indeed is true and we are seeing wider acceptance of cigars in the marketplace, everyone has a chance to cash in on the market. SMKE claims to have the seeds of the Cuban tobacco plants for the Dominican Republic. If cigars become hot (no pun intended), you could probably roll anything between the leaves and sell it, especially if you tout it as being the same as the contraband Cubans. I made my play in a cigar company that I believe could prosper if cigars really do take off. I like the idea but chose a different path.
PS-our local Tobacconist has a premier cigar that comes in its own individual wooden box and is rolled on the thighs of (you guess) after being soaked in a fine wine/cognac. It sells for $35 and is supposedly the best money can buy (it sure is the most expensive). If you do choose to invest in a cigar company, remember CIG. We will compete with my CIG against your pick. At the end of the year, loser buys the other a victory cigar<GGG>.
Andrew |
