Hi everyone. Romo here.
Longs on this board know me, and know I've been invested here since the THCZ days. I don't post on this board often, only when I feel I have perspective that may help other investors. I do, however, read this board daily and enjoy/appreciate all the insight and opinions. I've been investing for nearly 25 years now and have seen a lot, both good and bad, and this is the best of all the investor groups I'm involved in.
Many here, even die hard longs that love the company and have posted very positively about it over the past months/years, think this reverse split is bad, and have been venting their frustrations here. Usually, reverse splits are bad for a company, especially if they have reached their max outstanding share allowance, have stagnated as far as new revenue generation, and are simply reverse splitting so they can issue more shares and keep the lights on...it's very bad. RMHB is not in that position though, as per their 8K they are also reducing the maximum authorized shares by the same ratio, from 4 billion to 200 million, so they can't issue any more shares as a percentage of outstanding, so no difference there. So, I don't think this RS is bad for RMHB, and I'll try to explain why I feel this way by discussing expectations, market capitalization, and then RMHB's potential.
First, you have to manage your expectations. Everyone that gets involved in penny stocks thinks they can buy a huge number of shares at or around a penny a share, and somehow those shares will, in very short order, miraculously go to $1, $5, $10, $20, $50/share, and they will become multi-millionaires in a year or two, and retire and live a lavish lifestyle. It's nice to dream that way, I've done it as well, but then "the reality of things" sets in, and you have to look at facts and what is really possible.
The stock market works off market capitalization, which is simply the number of outstanding shares multiplied by the current price/share. Experienced investors know about it and watch it very closely. RMHB has been in the $20 million market cap range for quite some time now, a little higher a times, a little lower at times, and with the most recent fall in price, it's around $14 million (2 billion shares outstanding x $.007/share). If the stock stays at or near this price, at the time of the 1:20 reverse split we will go from 2 billion shares outstanding @ $0.007 per share to 100 million shares outstanding @ $0.14 per share (same $14 million market cap). Everyone's individual share count and price with adjust accordingly, so you will have the same overall dollar value, and the same percentage of the company, before and after the reverse split, just less shares in number.
So, the next question most want answered is, will this affect the potential growth of their share value, and where can the future value go? No one knows for sure, but I personally think this move will improve overall future share value by making this stock more attractive to potential new investors now, and eventually to institutional investors if we move to a larger exchange. So how high can we go? Good question. Rather than purely guess or hypothesize about where this company can go, we need to again look at market cap. In RMHB's Investor Presentation dated June, 2018, their published goal was to reach $100 million in annual revenue by December 2023, and have a market cap of AT LEAST $250 million (2.5x annual revenue). So, we are currently at $14 million, and by the end of 2023 they predict $250 million. That is roughly an 18x increase in 4.75 years. No matter what you're invested in, that is a phenomenal return that any seasoned investor would take all day long. However, I don't believe when they published those estimates they could have envisioned that in early 2019 they would be on the verge of having national distribution contracts in both Mexico and the US, so I'm guessing those predictions may be very conservative at this point, but let's just assume they are correct and still stand. But do remember, these predictions were based on hemp/CBD sales with 0% THC...the "good for you" brand products.
Now enters Doug Gillen as VP of Sales. With his connections in the beer and liquor industry, he feels we can not only partner with a national distributor for CBD/hemp infused beverages right now, but also for THC infused beverage once they become legal at the national level. He believes this could happen in the next 2-4 years, and those THC sales could account for 80% of RMHB's overall revenue. EIGHTY PERCENT!!! If this is true, and they meet their goal of $100 million in annual revenue for just hemp/CBD beverages by 2023, and that's 20% of sales, that means the THC sales could be $400 million annually, with $500 million overall annual revenue for RMHB. With the same market cap multiplier (2.5x), that would mean a potential market cap of $1.25 billion, or about 89x current! Multiply your current dollar position in RMHB by 89. How does that number look? Mine looks damn good.
Now, as far as whether a reverse split is good or not good, for those already invested, the number of shares involved is basically irrelevant. But look at this. At 2 billion shares outstanding, even a $1.25 billion market cap is only $.625 per share, not even close to getting us on the big boards. At 100 million shares outstanding (1:20 RS), $1.25 billion market cap equals $12.50/share, very comfortably placed on any of the big boards, with lots of room to grow. Which scenario seems more logical and attractive to institutional investors? As I stated above, I think this RS is good news for all longs!
If all that isn't enough to make you excited about RMHB, think of this! All projections above are based on a market cap that is 2.5x annual revenue, per RMHB's Investor Presentation. That is a very conservative multiplier. For comparison, Monster Energy Drinks, who is probably our best comparison when we dream about "what we can become," currently has annual revenues of 3.8 billion (2018), and their market cap is $29 billion. That's about 7.5x annual revenue. Even further, the leaders in emerging markets, which CBD and THC beverages would be, often command higher market cap multipliers. CVSI, for example, has annual revenues predicted for 2018 somewhere between $45 and $50 million, and a current market cap of $550 million, or 11-12x annual revenue. The multiplier is mostly influenced by profits as a percent of revenue, but also by how many investors want to own the stock. More investors equals more demand and results in a higher multiplier.
So, for those that are mad at the company, and who are thinking of selling their shares because this has ruined their chances at great wealth, tell me this; what will you put your money into once you sell RMHB? What other investment has anywhere near this potential, pre or post reverse split. If you have something with better potential than RMHB over the next 2-5 years, PLEASE private message me as I want to invest in it.
Of course, this is all just my personal opinion based on my research and my thinking. Please do your own due diligence.
Good Luck to all longs! Go $$RMHB$$
Longs on this board know me, and know I've been invested here since the THCZ days. I don't post on this board often, only when I feel I have perspective that may help other investors. I do, however, read this board daily and enjoy/appreciate all the insight and opinions. I've been investing for nearly 25 years now and have seen a lot, both good and bad, and this is the best of all the investor groups I'm involved in.
Many here, even die hard longs that love the company and have posted very positively about it over the past months/years, think this reverse split is bad, and have been venting their frustrations here. Usually, reverse splits are bad for a company, especially if they have reached their max outstanding share allowance, have stagnated as far as new revenue generation, and are simply reverse splitting so they can issue more shares and keep the lights on...it's very bad. RMHB is not in that position though, as per their 8K they are also reducing the maximum authorized shares by the same ratio, from 4 billion to 200 million, so they can't issue any more shares as a percentage of outstanding, so no difference there. So, I don't think this RS is bad for RMHB, and I'll try to explain why I feel this way by discussing expectations, market capitalization, and then RMHB's potential.
First, you have to manage your expectations. Everyone that gets involved in penny stocks thinks they can buy a huge number of shares at or around a penny a share, and somehow those shares will, in very short order, miraculously go to $1, $5, $10, $20, $50/share, and they will become multi-millionaires in a year or two, and retire and live a lavish lifestyle. It's nice to dream that way, I've done it as well, but then "the reality of things" sets in, and you have to look at facts and what is really possible.
The stock market works off market capitalization, which is simply the number of outstanding shares multiplied by the current price/share. Experienced investors know about it and watch it very closely. RMHB has been in the $20 million market cap range for quite some time now, a little higher a times, a little lower at times, and with the most recent fall in price, it's around $14 million (2 billion shares outstanding x $.007/share). If the stock stays at or near this price, at the time of the 1:20 reverse split we will go from 2 billion shares outstanding @ $0.007 per share to 100 million shares outstanding @ $0.14 per share (same $14 million market cap). Everyone's individual share count and price with adjust accordingly, so you will have the same overall dollar value, and the same percentage of the company, before and after the reverse split, just less shares in number.
So, the next question most want answered is, will this affect the potential growth of their share value, and where can the future value go? No one knows for sure, but I personally think this move will improve overall future share value by making this stock more attractive to potential new investors now, and eventually to institutional investors if we move to a larger exchange. So how high can we go? Good question. Rather than purely guess or hypothesize about where this company can go, we need to again look at market cap. In RMHB's Investor Presentation dated June, 2018, their published goal was to reach $100 million in annual revenue by December 2023, and have a market cap of AT LEAST $250 million (2.5x annual revenue). So, we are currently at $14 million, and by the end of 2023 they predict $250 million. That is roughly an 18x increase in 4.75 years. No matter what you're invested in, that is a phenomenal return that any seasoned investor would take all day long. However, I don't believe when they published those estimates they could have envisioned that in early 2019 they would be on the verge of having national distribution contracts in both Mexico and the US, so I'm guessing those predictions may be very conservative at this point, but let's just assume they are correct and still stand. But do remember, these predictions were based on hemp/CBD sales with 0% THC...the "good for you" brand products.
Now enters Doug Gillen as VP of Sales. With his connections in the beer and liquor industry, he feels we can not only partner with a national distributor for CBD/hemp infused beverages right now, but also for THC infused beverage once they become legal at the national level. He believes this could happen in the next 2-4 years, and those THC sales could account for 80% of RMHB's overall revenue. EIGHTY PERCENT!!! If this is true, and they meet their goal of $100 million in annual revenue for just hemp/CBD beverages by 2023, and that's 20% of sales, that means the THC sales could be $400 million annually, with $500 million overall annual revenue for RMHB. With the same market cap multiplier (2.5x), that would mean a potential market cap of $1.25 billion, or about 89x current! Multiply your current dollar position in RMHB by 89. How does that number look? Mine looks damn good.
Now, as far as whether a reverse split is good or not good, for those already invested, the number of shares involved is basically irrelevant. But look at this. At 2 billion shares outstanding, even a $1.25 billion market cap is only $.625 per share, not even close to getting us on the big boards. At 100 million shares outstanding (1:20 RS), $1.25 billion market cap equals $12.50/share, very comfortably placed on any of the big boards, with lots of room to grow. Which scenario seems more logical and attractive to institutional investors? As I stated above, I think this RS is good news for all longs!
If all that isn't enough to make you excited about RMHB, think of this! All projections above are based on a market cap that is 2.5x annual revenue, per RMHB's Investor Presentation. That is a very conservative multiplier. For comparison, Monster Energy Drinks, who is probably our best comparison when we dream about "what we can become," currently has annual revenues of 3.8 billion (2018), and their market cap is $29 billion. That's about 7.5x annual revenue. Even further, the leaders in emerging markets, which CBD and THC beverages would be, often command higher market cap multipliers. CVSI, for example, has annual revenues predicted for 2018 somewhere between $45 and $50 million, and a current market cap of $550 million, or 11-12x annual revenue. The multiplier is mostly influenced by profits as a percent of revenue, but also by how many investors want to own the stock. More investors equals more demand and results in a higher multiplier.
So, for those that are mad at the company, and who are thinking of selling their shares because this has ruined their chances at great wealth, tell me this; what will you put your money into once you sell RMHB? What other investment has anywhere near this potential, pre or post reverse split. If you have something with better potential than RMHB over the next 2-5 years, PLEASE private message me as I want to invest in it.
Of course, this is all just my personal opinion based on my research and my thinking. Please do your own due diligence.
Good Luck to all longs! Go $$RMHB$$
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