Key headwind is Regal as a shareholder. They tend to lend shares out and buy them back consistently turning them over and creating volatility, and usually profiting from retail.
Couple of key items that weren't addressed in the Q and needed to be, have lead to some major guesswork and misenterpration on this thread. Best case scenarios across the board are priced in.
Gross margins:
1) Starting stock for the Q, and production rates for the Q weren't remotely identified.
2) How much of receipts (excluding online of course) is balloon payments for the new contracts?
Production:
1) Mgt flagged difficulties in meeting orders. "Working around the clock" is not a sustainable method to justify a $0.3 billion M.C.
2) So what is the timeline and COST to upscale production capabilities? The answer to this flags when a CR is likely and how substantial it will be. Production growth at a rate that justifies this MC would cost much more than the cashflow. Which is to be expected, but where are the guidance plans for upscaling. One has to consider that this hasn't been planned sufficiently to be announced, so meeting growth exponentially is not gonna happen short term.
"Strike while the iron is hot, is the Covid theme, particularly in US. If they're hardly meeting ANZ production/distribution, how can they possible accelerate growth in US, without huge expense?
This is going to be great traders stock given the excitement and extreme pricing resulting from all that retail excitement. I refer back to my original call. Regal's algos will make a killing off the excitement and despair loop.
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