Mega Brands Inc MBLKF

When will I ever learn?

[marcrobert]

- Companies with these kinds of issues don't just bounce back to former glory, especially in this kind of economy.

- Fairfax was holding the cards, dont know how many shares they are taking.

Going forward:

Immediate change to float : +290 M shares, Future: + 230M, so float is immediately 9x larger, and later up to 16x larger.

My analysis: Based on that, if they can achieve the growth and profitability they had when stock was at all time high, and be consistent for a few quarters, the stock should trade around 1.80 to 2.50 (i.e 10-15 times less than $25, since eps divided by 10x or 16x as many shares).

I don't see how this can't settle around 50 cents or less. also, 50 cents is not cheap (it is looking at yesterday's float, but it is a huge premium now)

Also, after this quarter, assuming its OK for MB (economists today were proven wrong in the US as retail sales in december negative versus their positive estimates), then there are 3 quarters of pain before next christmas.

So basically, I will stay away from this unless anywhere near the current .80 price, unless they do a reverse split or it goes down to 5 - 10 cents given this ginourmous number of shares outstanding and more to come.

when are the warrants exercisable, hopefully not any time soon, but mark the date on a calendar if the stock is well above .50 by then.