Sunday post28 Jul 2019 11:40
I posted my very general revenue thoughts on Zoetic on the 16th July as no-one had really done so other than OSG in his crude and repetitive way. Since then the Annual Report has been published with its very negative figures for the year up to 31st March 2019 and the SP has tanked.
I am very upset, as are many long term holders. I feel certain that some of those holders have sold out, contributing to the SP slide and that the usual crew of traders have aided that process with their ‘rinse and repeat’ sales process.
I suppose it is all par for the course really, but it does not make the SP any easier to look at. I did not expect the SP to get down to 7p and that is therefore something on which I was wrong. I do however feel that this slide has brought out the worst kind of poster and the worst in our very active triumvirate of JJAL, AI87 and Burningspear. There efforts to talk down the share are relentless and obviously all focused on achieving as low a SP as possible, so they can buy in and ride it back up.
Imagine if it did go to 6p. They could ride it back up to 9p for 50% !! it boggles the mind. The current SP offers ‘investors’ the chance to ‘bag’ at just under 15p. Quite remarkable. I believe the current SP represents the most ludicrous buying opportunity, but the market is clearly nervous and skittish as a share falls and no-one is really sure what to do. It’s a confidence game and HNR don’t always do their best at inspiring confidence. I do expect the tide to turn with some big buys appearing in the next few days.
I previously made an estimate based on HNR receiving $6 per pack of Chill sold and 10 packs a day per store. Let’s drop that to $5 and 8 packs per day but make it 50 outlets as that number will be reached by the end of August I feel.
8 x 5 x 30 x 50 = $60,000 per month selling small amounts of smokes out of many outlets. It’s 12,000 packs so they will need to keep making them! Even if my estimate is 33% too high still, you still have $40,000 per month. This is why HNR have Ox handling all that fiddly distribution. Subsequently you will have to add chews to that revenue.
Negative posters have and are still rubbishing the not yet live websites for Chill and Zoetic. The promotion for these will largely be by social media. This is NOT an area of expertise for me. But it does not have a big cost associated with it. What would I add for direct web sales? I don’t know but it will be an addition. So I think that figure above can be seen to be very conservative and the actual figure will hopefully be much higher.
Continued below
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