Shades,
While you think it makes your case, apparently RileyG did not, and thus censored it from our inquiring eyes.
What it states is that companies like RMIL will have to deal with the marketing prowess and power of PepsiCo, Coca-Cola, and Nestle' in a increasingly commoditized market for bottled water.
RMIL is unlikely to have their new bottling plant on line before Summer, 1998 and thus no earnings. However, they will have operational charges against earnings(if any), and then they will have to transport this product farther to market than those closer to major markets. (or else sell to a lot of foreign firms where costs are less relevant)
Most of all, to have their products carried in various markets or convenience chains, special "arrangements" will have to be made with these stores in order to convince them to carry RMIL products over those of the bigger producers. (We all know that incentives are paid by large producers of commodity food items to supermarkets in order to carry their products exclusively.)
And so far as I have seen, the RMIL/RMCW merger was contingent on $5 million in financing which no one has yet seen, although an agreement has allegedly been penned. So you have a company which will likely not be profitable until next summer at best. I would feel much better about the chances of a short squeeze were this a company returning to profitability, but it is bleeding money from every orifice and will continue to do so for some time. And then you will have to assess the effects of dilution.
Shades, people do short squeezes because a unvalued company has been unfairly beaten down in the marketplace or the company is returning to profitability and the shorts haven't felt the need to cover. They don't have much chance of success with a company that can't figure out what they want to do, garment fabrication or bottled water, nor meet some sense of financial stability and operational progress.
RMIL is a poor candidate for any of these things and one only has to look at the public filings and press releases and use deductive logic to understand the worthiness of investing large amounts of money into the company. And someone will be left holding the bag eventually. Those who have bought in early are already profitable, but those who bought at $3-4/share are seeing serious deficits. It will take serious fundamental change, (like seeing $10 million ACTUALLY show up in an account) to make this puppy go higher.
Good luck, shades... but remember that RileyG didn't seem to place the same spin on those last two paragraphs as you did. Hence, one more example of selective truth on his part.
Regards,
Ron |
