"Oh and what makes you think they are going to hand over 2% of anything just because of some marketing gimmick come on I am as bullish as you but to pull those numbers out really to have a royalty on the new product going forward based on the old products revenue is a big call... do I buy Olay in a tub with or without the fancy applicator for $$."
I'm not sure too many would agree that we are talking about a 'fancy' looking applicator if the front cover of the company's 2013 Annual Report was giving away any clues. In my opinion it resembles something like one of those complimentary coffee stirrer/spoons found on a café countertop, however as it represented the very first product image to ever grace the front cover of an Annual Report, there's a reasonable chance that at least one board member sees some value in this 'marketing gimmick'
However, it's also fair to concede that the market also agrees with your theory because the sp of OBJ still remains under 10c today.
Not withstanding the notion that the market gets it wrong 99% of the time, there are a couple of other important factors that would appear to already be debunking your theory.
1. If this marketing gimmick was capable of enhancing the delivery performance of the world's top selling anti-aging creams by up to 7.5 times or 750% into the lower layers of the skin, then one can assume that this may provide a significant benefit to the consumer, and further increase market share for a product which already demands the largest.
2. If P&G weren't already convinced of this marketing gimmick being able to do something special for their top selling skin care product, then page 9 of the company presentation wouldn't be claiming all of the following:
– Agreements covering 7 of P&G key product categories – License fees & Royalties based upon end product value. – Terms for all product licenses agreed – P&G to pay all OBJ’s development program costs. – Guaranteed minimum investment levels for life of agreements
3. Hope you didn't miss the second pearler on that list because to my understanding this one confirms that P&G are already convinced that this gimmick will drive sales of ALL components which make up the end product - So, yes in other words I suppose you could say in some respects that P&G want to pay a Licensing fee and Royalties to OBJ on one or more of its original blockbusters ;)
– Agreements covering 7 of P&G key product categories – License fees & Royalties based upon end product value. – Terms for all product licenses agreed – P&G to pay all OBJ’s development program costs. – Guaranteed minimum investment levels for life of agreements
This also suggests that P&G are taking the risk of over overcompensating OBJ for contributing what appears to be only a small element (or gimmick) of a multi-component product. In addition to OBJ's global royalties expert from the US, and Licensing expert from the UK, the results have obviously done a considerable part of the talking.
Imo.
OBJ Price at posting:
8.8¢ Sentiment: LT Buy Disclosure: Held
(20min delay)