LFvalueseeker

The company has changed dramatically and quite challenging to understand. My original post explained my personal strategy on these microcap low float stocks. I build a position and wait for its day/week/month in the sun. Stock was a 100% gainer within months. I don't think it's investable currently as they need to sort out market perception and it seems to be a failing knife. Also, the attributes that were attractive (cap structure, underfollowed, etc) are no longer there. I have been doing a bunch of work on Envision Solar (EVSI) and have started to build a position. I have been reluctant to post my findings here as I was accused of being a promotional pumper on RMBL even though I clearly stated my personal investment behavior. Microcaps have a distinct window to generate outsized profits, very very rarely do they become small or mid caps. I would be happy to debate EVSI and gather consensus from this community if it were to be productive for all.

I am chiming in so I don't get accused of disappearing. I am still trying to understand this acquisition. After a bit of time, I believed I had a firm grasp on the motorcycle market and all the aspects that made it interesting from an investment angle. I am trying to understand the used auto market landscape and how Wholesale fits in and does 1+1=3 through the combination with RumbleOn. Interested in other peoples thoughts.

I took some profits around $10.10 average. Sold 80K of 100k shares. Stock was up 10+ days straight. I am long 33,000 shares and adding on any weakness. Q3 numbers should be ~$25m based on the 100,000 offer announcement. Also Joe Reece joining is interesting. Serious experience in M&A and CST Brands was acquired/merged in a $4.4b transaction shortly after he joined that board. I am in no way implying the same value here. I believe he was strategically brought on board for a variety of potential reasons. I'm of the belief that as long as the multiple is within reason, and the position is not sleep at night too large, you really have to hold these stocks. These types of stocks at inflection points are difficult to value. I did trim my position which wasn't enormous to begin with, but if you dont hold on like after a double you are going to miss the 5% of stocks that are 5+ baggers, and considering 30% of these types of stocks the growth or profitability never comes and the stock goes down 25+%, you can't get a good return (maybe as good a return) if you dont have a possibility of a big right tail winner. I agree with everything you're saying, however I still have scars from a few positions I was big in and watched all the profits fade away. I was a bit over my skis on this position from the beginning and watching it go from $4.25 to $10.00, I wouldn't sleep at night if I didn't adjust the position size. It is now a properly sized position for my portfolio. My biggest issue with microcaps is unsophisticated mgmt teams that do really dumb things. I was caught off guard on the capital raise RMBL did and thankfully it worked out and was the right decision. I have been a shareholder of some incredible companies that have destroyed value through a variety of poor financings and ill advised capital markets decisions. I have become more disciplined to take significant profits but it's mentally tough to watch winners continue to go up.

I took some profits around $10.10 average. Sold 80K of 100k shares. Stock was up 10+ days straight. I am long 33,000 shares and adding on any weakness. Q3 numbers should be ~$25m based on the 100,000 offer announcement. Also Joe Reece joining is interesting. Serious experience in M&A and CST Brands was acquired/merged in a $4.4b transaction shortly after he joined that board. I am in no way implying the same value here. I believe he was strategically brought on board for a variety of potential reasons.

For a double in a month or so... by all means. Better idea than the usual watch paint dry, buy FFH or BRK stuff. Nothing wrong with making a ****ton of money. Gonna spend some of it on a Harley right? Searching Craigslist for a used bike now...

Are victory laps OK on this forum? (asking for a friend who is worried about being called promotional and a pumper)

Sorry, I don't get the alerts for some reason. I was not happy about the secondary as it hurt momentum at the time, especially ahead of earnings - which were solid in my opinion. I am still long and have added a tiny amount to my position. In hindsight the secondary seems to be well executed amongst retail investors and certainly increased volume. I am looking forward to Q3 numbers. Any idea why the stock is up ~15% today? No real idea other than a "super reliable" source said, "low floats are moving today". That reliable source is some unknown twitter alias :) $RMBL $MRAM $PMTS $ASUR $OMEX - these are the other stocks they mentioned. Also technical traders are chirping about it which is a double edge sword. They help create momentum but when it doesn't do exactly what their charts dictate they bail. I'd prefer these traders to stay away for the time being.

Sorry, I don't get the alerts for some reason. I was not happy about the secondary as it hurt momentum at the time, especially ahead of earnings - which were solid in my opinion. I am still long and have added a tiny amount to my position. In hindsight the secondary seems to be well executed amongst retail investors and certainly increased volume. I am looking forward to Q3 numbers. Any idea why the stock is up ~15% today? No real idea other than a "super reliable" source said, "low floats are moving today". That reliable source is some unknown twitter alias :) $RMBL $MRAM $PMTS $ASUR $OMEX - these are the other stocks they mentioned.

Sorry, I don't get the alerts for some reason. I was not happy about the secondary as it hurt momentum at the time, especially ahead of earnings - which were solid in my opinion. I am still long and have added a tiny amount to my position. In hindsight the secondary seems to be well executed amongst retail investors and certainly increased volume. I am looking forward to Q3 numbers.

This is really strange. Numbers are referred to in shareholder letter that isn’t uploaded. Annoying to say the least

New write up today. (good read, no relation to the this blogger) https://reminiscencesofastockblogger.com/2018/07/12/new-position-in-rumbleon-selling-used-motorcycles-online/

In all fairness, my revenue numbers might be slightly high because of the ~30 day distribution lag. I'm very focused on the acquisition side and that doesn't translate to same day revs. Excited to see Q2 report and god forbid they put out any news about partnerships or other updates.

I wanted to provide an update on my thoughts on Rumbleon after some recent observations and ahead of Q2 numbers. FULL DISCLOSURE: RMBL is my largest single position with a cost basis of ~$4.50 across multiple accounts. I am very bullish on the company and their business model. I am not here to pump or promote this stock or any others. I came across this forum through an alert and joined the conversation. This is a microcap and very risky. Please do your own due diligence. Channel checks confirm that the company remains in hyper growth mode with all metrics pointing up and to the right. 1. Revenue: I expect Q2 revenues of $17.5 million. Q3 is modeled out at $30-$35 million and Q4 at $45-$60 million. I will tighten up the ranges when they report Q2 in a few weeks. This is based on a variety of factors but most important is their cash offer projections in their recent presentation. 2. Full year 2018 revenue of $110-$120 million. 3. Inventory: Inventory continues to build at a healthy rate. Q2 averaged around 600-700 bikes in inventory and Q3 is starting to see 1000+. 4. Awareness: They are still at the beginning stages of building brand name recognition but traction is apparent. BBB ratings are at 5 stars and continue to come in favorably. A recent video advert showed 823,000 views. I am receiving more google alerts from motorcycle forums discussing Rumbleon and their experience. The conversation under the digital adverts is shifting from angry to receptive. i.e. Motorcycle owners are starting to understand that there is a price for liquidity and seamless transactions. I'm surprised to see this shift happen so quickly but it's largely do to their digital team engaging with commenters. 5. Peer Group: tough nut to crack as CVNA is the only company that is a good comp in the public markets. CVNA trades at ~4X 2018 revenue projections and loses significant money as they scale. I believe RMBL business model is superior with a clear path to profitability. RMBL trading at .8X 2018 rev projections. Yes, the used car market is 100X bigger then bikes but will substantially more competition. It's above my pay grade to deep dive into how strong this comp comparison truly is. Treat it as a single data point. 6. In an effort to build the moat, the team is contemplating introducing a listing option for those potential customers that do not accept the cash offer. Little details beyond that but it's an interesting way to keep them in the funnel. 7. Risks that can be evaluated after Q2 numbers include cost to acquire each bike, conversion rate, average turnover, distribution mix, average selling price and cash position.

BBB link for reviews. Helpful to track and see good things and potential problems from real world customers. https://www.bbb.org/charlotte/business-reviews/motorcycle-dealers/rumbleon-in-charlotte-nc-577102/reviews-and-complaints

I can't believe G&A will stay stable although management has said that gross profit will go up (although 12% is above where it is at currently). I don't know if I buy the retailer bit. The money is made by buying from consumers and then reselling to consumers. With a retailer, the wholesaler likely has pricing power and there really is no benefit of having a network on the buy side. I think the closer comparison is craigslist, where they literally have put no effort into maintaining the website for 15 years and yet basically no one is replacing them. Clearly they act more middlemanish than craigslist, which is only a platform while RMBL is like a broker, however the network effects of this marketplace on both ends leads to synergies, but even in the world of brokers, network effect benefits are huge. Look at online stockbrokers or big insurance brokers etc. Obviously smart people can look at the same company and come to different conclusions. 90% of last quarters sales were to dealers and auctions. Consumers buying bikes represented 10%. They are projecting that GP will go up as the mix shifts and consumers become a larger slice of the distribution pie. From the way I understand it, the G&A will remain stable as the infrastructure and head count is in place to handle substantially more volume. To me, the most important number is the cost to acquire a bike. If that starts to move higher it will be due to competition or realization of a smaller market, both bad scenarios. They have 8.4% GP margins selling 90% to dealer and auctions. That is what is intriguing to me.