MusclePharm Corp (OTCMKTS:MSLP) Crashes After Quarterly

In yesterday’s session MusclePharm Corp (OTCMKTS:MSLP) crashed an ugly 21% by the closing bell. The reason behind the slump was the quarterly report the company put up after market hours on Monday.

There filing went up a few minutes after the closing bell on Monday and the effect of its content was immediate in Tuesday’s session, with MSLP opening with massive gap down that escalated to a daily low of $2.75 per share. Despite dragging itself out of that hole, MSLP still ended up a massive 21% down by the bell.

Here is a brief rundown of the report’s balance sheet, showing the company’s state as of Sep 30:

• $3.4 million in cash
• $67.4 million in current liabilities
• $33.9 million in quarterly revenues
• $27.6 million in quarterly net loss

The amount of money MSLP lost this quarter alone is probably enough to make some investors cringe. Figures are slipping on a QoQ basis across the board. Revenues are down YoY and are dropping 32% against the previous reported quarter. Net loss is running wild due to massive restructuring charges incurred over the period.

This brings us to the next issue with the company. MSLP is going through a massive and seemingly painful restructuring process that includes the closing of existing facilities, reducing headcount and discontinuing certain products. This effort, initiated in the summer of 2015, cost the company $17.9 million and the current quarter is expected to see more restructuring charges stack up.

The company explicitly stated that all previous guidance for 2015 and 2016 revenues should be disregarded and is being withdrawn, again resulting from the huge push to restructure.

The market’s reaction to the report’s submission was rather unambiguous. Whether the stock is going to delve deeper down the chart or stabilize at this level remains to be seen.