RE:$40M revenue per quarter needed to BREAK EVENIn my opinion, Actually this has been the smartest thing I've heard a long say on this board. Not only vaguely accurate about the expenses but even on the cheap low end product which Canadians want most, which is the exact opposite of the original fire mythology, (who knows now, they bought a trimmer go figure). Exactly why I was saying Hexo model was a good one, pricing oz at 125.. only problem is consumers can only buy 1 oz at a time lol.. the govt taxation and rules are soooooo messed up, no LP will survive only the ones that can sit on their bank accounts long enough preying the govt changes legislation.. (yea, I know.. goodluck on that right?)
theTransporter wrote: Quite a long road ahead of these guys in order to just break even, let alone turn a profit.
One thing to stop cash burn, another thign to pay back the $85Mdebt that is coming due in 18 months from now.
How did I arrive at the $40M per quarter?
Operating Expenses: $15.3M per quarter
Other Expenses: $4.9M per quarter (to service debt)
Seeing that their current margin on products sold is approx 50%, they will need to sell about $40M per quarter to break even.
These guys are struggling to get past $12M. They have $46M of product in inventory at the end of Q3 that clearly shows THEY CANNOT SELL PRODUCT!
It seems like in Canada there is a greater demand for SH1T product than there is for high quality product. Let's face it, Supreme picked the WRONG strategy to focus on high-end product as clearly there is either NO DEMAND, or THEY CANNOT SELL. I pick the later of the two.
Best hope for anyone invested here is they sell the company.