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  • mtnlion07 mtnlion07 Feb 24, 2012 10:44 AM Flag

    Restructuring hopes

    In a very high percentage of cases (well upper 90s!) the common stock of the old stockholders is whiped out. It is valuable only as a souvenir of as wallpaper. if the companiy emerges from bankruptcy process as continuing going concern, it will issue new common stock. Who gets that? People and entities on the list starting below the "wages" line. In many bankruptcies, the reason for the corporate failure is the use of too much leaveage (is that word familiar from the current financial news?). In order to keep operating, the company must stop paying so much interest on debt and dividends on it preferrred stock (if any). So the court converts old debt and preferred stock to new common shares. Common holders get nothing in virtually all cases.

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    • Great analyses make yourself fell comfortable. Anyway, Thank you!

    • Its credible because its true - everyone has to have a hobby. Its a hobby because I worked in the phonebook industry for several years, YLO is a way to monitor the industry and it probably only takes 10 minutes a day to read and comment. Plus I hate cheerleading.
      You are welcome to listen or not listen to me - however, you can't dispute that I have been extremely accurate with my detailed cashflow, balance sheet and stock price forecasts since I have been posting on this board for the past year.

    • In Roney's defense, he puts up specific numbers.

      What I love about Yellow Media is that in the same thread you have someone like Bradford who think Yellow will not supernova and its just daylight as usual and someone like Roney who insists it will implode into a black hole and suck the universe into it. :)

      Truth is somewhere there in the middle. It's a frustrating company to analyze, because the shrinkage of revenue in one segment is partly offset by growth of another segment, but they appear to have different profitability. If you go off of analysts like Credit Suisse, you can find ways for the company to work its way through, just barely. If you go off the historical declines of $15M to $20M EBITDA per quarter, then Roney is right it implodes to negative EBITDA.

    • Thanks Roney,

      So you have no financial interest in YLO, but you spend time every trading day discussing how bad YLO is.... REally? After I sell a holding I move on to my next investment, I think about it, I read the message boards... But you are still here eh, with no financial interest? Is that credible?


    • Don't have a position anymore - traded back and forth a bit, but always was negative on YLO. I worked in the industry so I know the company very well, but not from the inside. I just want to give investors the benefit of my knowledge. I think that Tellier has done a terrible job, and he is about to screw over the bondholders like he has the shareholders.
      I predicted the cash profile extremely accurately for the past eight months (see my previous posts) because I understand the industry economics and their financial statements.

      Paul Gardner, CFA

      Bonds maturing in the next 3 years. He has recently engaged into the bonds. Thinks the rest of it is worthless. He thinks they will go into receivership. The bondholders get to take the asset. When it comes out of restructuring, you will have a company at 2.5 times EBITA. He thinks he is getting compensated for the risk and will get paid in full.


    • It's worth noting that companies that file for bankruptcy tend to be losing money, not making money.

      Companies that go into receivership go into receivership because it is the mutual understanding between creditors and the company that the company will never make more money than what it owes the creditors.

      Thus, the existing equity is worthless. To extrapolate these averages to this particular situation is reckless, sir.


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