RVLV Reports a Net Loss, Gives All The Money They Raised In Their IPO To TSG, But Is It Still A Buy?

The earnings were actually great, but the bottom line changes drastically when you account for the $41 million they gave to TSG, one of their largest shareholders. Two of RVLV’s board members are affiliated with this firm.

They actually tell you this will happen several times in their prospectus

98% of the voting rights are controlled by insiders

MMMK is controlled by the founders, Michael Karanikolas and Michael Mente.

TSG

Quite the payoff from that $15 000 000 investment. Still concerning that they essentially just gave all the money they made from the IPO to somebody else…Kinda weird eh? Why would you do that? Just give all your investor’s money to somebody else?

It’s a great company though. They made money too; not a loss making operation like many of the other IPO’s we are used to seeing

983 employees as of the end of last year

Earnings will go down if the market turns bearish, which is a very real possibility. We broke the record for the longest bull run in history last year.

Almost half of their followers are from overseas, but they admit expanding international sales could be a challenge due to a limited understanding of cultural differences, and a lack of physical presence

As of last year, a large majority of their sales were at full price. Anybody who has been to a clothing store in an oil boom-town will know undoubtedly that once the boom ends — and it always does — clothing prices plummet, and those clothes you thought you could only dream of ever owning end up becoming surprisingly affordable.

A lot of opportunity for growth nonetheless.

Those numbers are slightly misleading as most of their value is know how

According to secinfo.com,  2,641,764 shares were purchased by institutional investors in the 2nd quarter, with Eagle Asset Management Inc at the top of the list, reporting a 10.34% stake back in July. Smart money seems to like it, and with only 11.7 million shares outstanding, any bullish news could result in a sharp spike.

If the market remains bullish, this recent sell off could be a good time to pick up some shares, but it’s never that easy. The market is very volatile right now. Ray Dalio just released a 30 minute video detailing the virtues of Chinese investments, and he’s not known for public appearances. Usually when he does interviews, it’s because he has strong feelings about a particular issue, and wishes to share his views with the public. More than half of his portfolio is invested overseas

RVLV also faces a huge China risk

Again, it’s never that easy, but this is definitely something to keep an eye on. Good luck and happy trading everyone.

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