NeoMedia Technologies, Inc (NEOM)

[ASTOCKCOLLAPSE N0W]

The acquisition spree was a huge debacle and will ultimately prove to be the demise of the retail investor base.

Not only did NEOM turnaround and sell the acquired companies at a loss but NEOM still holds the $22+ million in death spiral Convertible Preferred on the balance sheet - the debt currently accruing liquidation penalties because NEOM can't even file a registration statement on time.

Imagine taking out a loan for $1 million to purchase a property. The terms of the loan dictate that for every $100 drop in the value of the property $3 more dollars are tacked onto the face value of the loan (death spiral).

You then buy your house for $1 million. Nine months later you realize you can't afford it and sell it for $500K - but because of subsequent financial blunders that $500K received in the sale must be used to pay back other loans. So now you have a $1,017,000 loan outstanding and no asset. That's exactly what happened to NEOM with the acquisitions. WTF???

Appallingly, Fritz continued to talk about "leveraging up" in today's CC. "Leveraging" is precisely what put the company in the position it is today - virtual bankruptcy.

Leveraging only works if you have shrewed asset allocators to deploy the borrowed capital. The people making the decisions at NEOM are absolutely some of the worst asset allocators I have ever come across. NEOM has made, what, ten asset purchases - patents, entire companies and equity stakes in companies - and to date not one, NOT ONE, has ever generated a positive return.

Check that - I think iPoint was recorded as a gain after initially writing down the value of the investment.