NeoMedia Technologies, Inc (NEOM)

[jonesieatl]

YA might 'play' these companies ...

... like many traders play otcbb/pinky 'long-shots'.

I hear from a lot of traders who dabble in these areas that they (traders , not Yorkville) strategically place money into 10 or more long-shot plays hoping one is a home-run , like maybe a '10-bagger'.

As long as they cut losses fairly quickly on the losers , the strategy can pay off.

It appears that Yorkville has 100-200+ 'plays' going.

Fact: Out of the 117 Yorkville Clients for whom I've tracked stock performance since their initial YAGI financings , 8 are in the green PPS-wise since wherever their stock price was on the date of initial financing. (Dates of initial financings on these range from 2004 to 2007)

Fact: The majority of the remaining 109 have realized share price losses ranging from 90% - 100%.

---- More specifically , 71 of the 117 companies have realized that magnitude of loss for their 'buy/hold' shareholders , stock price 'decimation and worse'.

---- Another 21 companies have realized share prices losses from between 50% and 89%.

---- This means 92 out of the remaining 109 (non-'green') companies have lost between 50% and 100% of their value and that does not include the value depreciative effects of what is often substantial dilution.

Fact: As of 4/28/08 (my last comprehensive PPS update for the 117 tracked companies) the 8 gainers realized share price appreciations of 25% , 33% , 55% , 114% , 170% , 183% , 140% and 188% since their respective dates of original financing.

Fact: Yorkville isn't providing their services to any '3-baggers' , let alone any '10-baggers'.

Fact: From available reports and quotes by Yorkville managers , Yorkville runs a very profitable business.


Based on the above facts I would be interested in hearing others' thoughts on how Yorkville makes their money.

I'll offer a couple of my own interpretations of the facts.

Interpretation: In spite of common shareholders' hopes that Yorkville makes these loans strategically betting on the ultimate soaring of clients' share prices , analysis does not bear this out as their actual reason.

Interpretation: Yorkville must indeed be profiting relatively handsomely from:

-- the interest rates they charge
-- the structuring fees they charge
-- the due diligence fees they charge
-- the investment monitoring fees they charge
-- the profitable sale of large quantities of stock shares on the open market , even though such sales continue to depress the stocks' prices.

As Yellowjacket points out , we don't immediately see Yorkville dumping enough shares on the open market to immediately recoup for them the value of a loan they may have just made. (YJ: NEOM paid 2 fees totaling $90K so they only netted $700K, not $750K, right? No big diff, just noting.)

We did see on 5/16/08 NEOM netting $441,000 on a $500K debenture , with conversions allowed at 80% of a 10-day VWAP.

Since that time we haven't seen 163 million shares dumped ($440,000 divided by $0.0027) , but we have seen 50 million shares traded and it's only been 3 weeks. I'm not saying those were all dumped by Yorkville , but given enough time .....

Interpretation: Perhaps , over time , by having access to these healthy discounts on share prices Yorkville can indeed profitably dump enough shares on the market of a particular stock to recoup their actual cash outlays.

--- Plus , due to the 'death spiral' nature of the compounding of APR's and the additional 'interest' all these 'fees' represent , they could come out pretty good over time.

--- Plus , with these financings Yorkville is also getting warrants to cumulatively purchase tens of millions more shares at prices 'certain' .... except that these warrant prices are always subject to being revised downwards pursuant to any whim on the part of Yorkville the next time the company comes crawling for another paycheck loan.

Thoughts anyone?

jonesie


Yorkville / Cornell Tracking Board #board-9964


"I can think of no more valuable commodity than information"