CVSL / JRJR Update – 19% of Public Float Owned
As of the open on February 17, Groove participants now control 19% of CVSL’s publicly traded float, up from 15% in our last CVSL update on January 29. The buying among our community participants has accelerated significantly since CVSL management released the $49-$50m expected revenue range for Q4, as this wholly put to rest the most damaging of the rumors that we believe were being spread by short sellers – that the company had experienced a significant downturn in Q4. The indicated revenue range makes it clear that CVSL is actually performing better than expected and the company’s responsiveness in taking the aggressive actions we proposed to address the naked short selling situation gives us confidence that they understand the importance of protecting shareholder value. Additionally, discussions among several active CVSL owners in our group have led to several ideas that we are culling to craft the best combination for additional recommendations to CVSL management – steps that will further ensure that those who would use illegal methods to try to push CVSL shares lower than they should trade on its merits will determine that it is in their best interest to ply their craft elsewhere. We are completing a comprehensive due diligence review of each proposal and we will share what we learn with the broader community shortly.
CVSL shares represent a tremendous bargain trading at just over $1 which equates to a $35 million market cap for a company that we expect to produce $190-$200m in revenue over the next 12 months. The public float of CVSL/JRJR is rapidly being acquired by savvy investors and they may soon be joined by short term traders and short sellers seeking to cover part or all of their bet prior to the DTC share accounting and reissue process that will start over the next couple of weeks. In summary, CVSL/JRJR represents a very cheap stock given its stock price / market cap relative to its operational performance and prospects, but there are near term developments that may bring other investors / traders into the fold to compete for the remaining CVSL shares in the public domain.