New Age Beverage Corp. NBEV
NBEV overpaid $85m for Morinda, an MLM with inflated China revenues and illegal operations; the stock faces 60% immediate downside and likely insolvency.
Thesis
New Age Beverage (NASDAQ: NBEV) paid $85m for Morinda, a multi-level marketing firm whose Tahitian Noni Juice business is misrepresented to investors. Grizzly's on-the-ground China research shows Morinda's 2016 China revenue was $33m per SAIC filings versus $68m in SEC disclosures (a 51% inflation), and the company operates illegally in 60% of Chinese provinces without required direct-selling licenses — a regime that has already forced peers like NHTC to suspend operations after CCTV expose. Morinda's European HQ was being wound down months before the deal closed, and $50m in contractual obligations owed to Morinda shareholders were undisclosed. CEO Brent Willis, who previously led XFITB and ECIGQ to near-zero, just sold 300,000 shares for $1.6m. Grizzly sees immediate 60% downside, an intermediate $2 target, and potential insolvency.
SCQA
New Age Beverage is a serial-acquirer beverage roll-up that closed a $85m merger with Morinda, a multi-level marketing firm selling Tahitian Noni Juice, pitched as a transformational and accretive deal to shareholders.
Morinda's SEC-disclosed China revenue is inflated 36-51% versus SAIC filings, it operates illegally in 60% of Chinese provinces amid a nationwide MLM crackdown, and its European operations were already being wound down pre-close.
Short NBEV: the Morinda thesis collapses once investors see the SAIC-vs-SEC revenue gap, the missing MLM licenses, the NHTC-style China regulatory risk, and CEO Brent Willis's track record of failed public companies.
Immediate downside of 60% from $4.56 with an intermediate price target of $2.00; longer-term, Grizzly expects near-total capital loss as equity dilution and insolvency risk compound.
The three reasons
- 1
Morinda's 2016 China revenue ($68m SEC) was only $33m in SAIC filings
- 2
Morinda operates illegally in 60% of Chinese provinces without MLM licenses
- 3
CEO Brent Willis has history of failed public companies (XFITB, ECIGQ)
Primary demands
- Sell NBEV shares ahead of expected collapse
- Scrutinize Morinda's SEC-disclosed China financials against SAIC filings
- Question NBEV's serial equity-funded roll-up strategy under CEO Brent Willis
KPIs cited
Pattern membership
Precedents cited
- Natural Health Trends Corp (NHTC) CCTV expose and ~60% share decline
- China MLM crackdowns on Hualin Group, Quanjian Group, Infinitus (China), Tianshi Group
- Brent Willis's prior failures at XFit Brands (XFITB) and Electronic Cigarettes International (ECIGQ)
Composition what's on the 20 slides
Slide gallery ·
Notes
Cover page states 'Publication Date June 27th 2018' but this appears to be a typo — body references events through June 2019 (stock price 'as of June 26th 2019', YCharts timestamp 'Jun 25 2019', April 30 2019 Roth ATM agreement). Filename and SCQA dating use 2019. Classic Grizzly template: Word-style prose report with embedded on-the-ground photos of empty/mis-licensed China offices (p.11-13) and SAIC vs SEC revenue-gap argument. Strong SCQA narrative but visual craft is low (body text, few charts). Author is the Grizzly Research firm — no named individual signatory.