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Nesho

730 Posts.

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13/01/20

11:42

Post #: 42349123
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Originally posted by verysmallcap: ↑

so the the thing is this is really two different companies now.

dairy packaging was a revenue game and was ~80% of the value of the company.

omniblend is an ebitda game. much less sexy and easier to grow top line (which is irrelevant, it's about ebitda).

the company has struggled, period. a mature company (any SP500) acknowledges the struggles and talks about a future plan. Bergen companies (and I suspect KTD) will tell you that they are behind but they are always just about to enter some "takeoff" phase and make light of their failures (James Gong left for a reason).

you really have to separate the PnLs for the two businesses. I can take a look and tell you what both should have but it's going to be bleak coming from me, so better to listen to someone else. I don't think dairy is worth much over $10-15m and Omniblend maybe gets you to double that. the market thinks Dairy packaging is worth $60-70m and Omniblend is worth $15m. So in my opinion this is a sub $30m company that even if it crushed it would go to $40m in my valuation (I work in private markets and usually buy companies much cheaper than this one). That's why I think my opinion doesn't matter too much here.

my worry is that KTD will combine the financials of the two companies to trick everyone and talk about growth that primarily came from Omniblend without adequately addressing the struggling dairy packaging business (again where most of the value supposedly is) and especially comparing to dairy multiples and key financials.

Cards 100% on the table, I'm mostly around this forum to see if the stock price gets out of control (no touch with financials or future prospect of the company) and runs above 50-60c so that I can short it. Good financials are released early and come out in early and mid January. KTD doesn't have much good to show so they will wait til the end of the month and find ways to make bad numbers look good. If they succeed in doing that and the price runs up to over 50c when they release the financials I will 100% be shorting that morning. the stock price would have to be under 10c for me to buy back in (I had a decently large IPO stake and have only sold since then).

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So if the quarterly report indicated 15m revenue, even if most of the revenue was coming from Omniblend, would that be considered bad numbers to you?

KTD Price at posting: 38.5¢ Sentiment: Buy Disclosure: Held
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KTD, page-1020

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