YTB’s Quarterly financial report came out on Friday. During this years Convention, Scott Tomer announced a Q2 profit on earnings before income taxes. He was correct, as YTB did post a $1.2 million net income from continuing operations. What he may or may not have known until after the Convention however was a $2.6 million in contract termination costs for the disposal of REZconnect, which resulted in a “discontinued operations” line item resulting in a loss of $2.8 million total dropping the $1.2 million profit into a $1.5 million loss overall for the quarter. The current portion of the $2.6 million liability balance is $608,000 and is required to be shown in our SEC filing based on future commitments.

REZconnect has been somewhat of a sore spot in years past. Micheal Brent had been selling off shares like it was candy. Rumors surrounding the subsidiary also pointed to a net loss in revenue for the entire company for years. This was the first time the subsidiary had been broken out to show it’s contribution. REZconnect operations reported net revenues of $869,000 and a loss from operations of $463,000. The Board of Directors made a strategic decision about the REZconnect business model, which they stated was serving primarily brick and mortar travel agencies, and felt it was not compatible with YTB’s current and future plans.

“As a result, the Company expects to realize cash savings of $2.4 million over the next 5.5 years based upon the cash payments to be made under the employment severance agreement versus the cash payments that would have been required under the original employment contracts.  Thus, while the Company has recognized significant expenses in the current period, the cash savings in the coming 5.5 years will serve to contribute a significant savings in terms of liquidity, helping to strengthen the Company’s position.”

In this current economic climate companies need to cut dead wood. While I have not seen, nor do I really care to see what others will be saying about YTB’s financial condition, I’m willing to bet you that they’ll be pointing to the huge loss in revenue over the last year do to the pyramid crumbling. While they will most certainly be pointing YTB’s “business model” as the cause of the loss in revenue, you should take a look at other company revenues to compare what they’re doing in this current economic climate. Royal Caribbean’s revenue (and profit margins) have declined significantly, resulting from large profits plummeting to significant losses over the last four quarters.

People are not spending in this current economic climate. Period.

It should be noted that the hemorrhaging of our RTA’s has slowed significantly in part due to the California settlement. While there was an enormous amount of speculation over California winning it’s argument of a gigantic pyramid scheme and successfully shutting the company down, the truth (as always) finally came to light. In addition, the “ungainly monster of 39 pages and 133 paragraphs” that was submitted as a class action law suit was also thrown out by the courts. Current RTA’s are just now starting to realize what I’ve known all along.

If you’d like to read my analysis of what our critics actually know about MLM and YTB in general, I invite you to read my e-book entitled “What the Critics Know About YTB“.

To further illustrate my point, I did take note of a couple of things in the notes section that critics were speculating (as they always do) about YTB’s financial condition and what the company would and would not be able to do.

Once Scott mentioned “profits from continued operations” our second payment for the California settlement was brought up. Some wondered if we happened to skip that payment in order to show profits. It should be pointed out that it was in fact paid and half of the settlement money is behind the company. Payment of $250,000 was paid as scheduled before the June 30 quarter ending.

In March, YTB’s credit card processor increased it’s reserve requirements, resulting in a $2.7 million balance to be held in reserve. While it was speculated that YTB would not be able to acquire the funds necessary to obtain the balance, that request was also achieved during this quarter. This too is now behind the company.

One of the funniest twists found in the financial statement that I doubt you will find anywhere but here is the saga of the proposed Conference Center that was envisioned by YTB to be built on land the company currently owns. Back in November, YTB sold a 9.9 acre out parcel of the 59 acres it owns to an undisclosed buyer. In late July, we found out through the media and the blogs that the buyer plans to build a Holiday Inn Express and a Country Kitchen gas station on the land that has been purchased. When news came out that the Wood River City Council voted to approve a funding agreement with Aventurs Development LLC. nobody bothered to check if the land in question had in fact been paid for.

“In addition to other consideration, the Company received a $500,000 promissory note dated November 24, 2008 as proceeds for the sale of land situated in Madison County, Illinois, which was non-interest bearing so long as there was no event of default thereunder.  Principal and other amounts under the note, collateralized by the related land sold, was due and payable on March 24, 2009.  On April 22, 2009, the Company sent a notice of default under the promissory note and mortgage to the purchaser because the purchaser failed to satisfy all obligations under the note within 120 days.  The notice required the purchaser to cure such non-payment within five business days of receipt of the notice, as required by the mortgage.  On May 6, 2009, the Company filed a complaint for foreclosure in Madison County, Illinois Circuit Court under the terms of the promissory note and mortgage because the purchaser failed to cure the non-payment within the required five business days.  On June 2, 2009, a notice of foreclosure was recorded against the land.”

Of course, like everything else that backfires on our critics for drawing conclusions based on what he reads and hears on the internet without checking actual facts, mums going to be the word on this. Instead, they’ll continue to focus on yours truly and the gross error I made when I didn’t check my source. As I’ve learned over the weekend, thanks to many comments, e-mails, and phone calls, it’s much better to surrender defeat in cases such as this in order to move on and get back on track.

Lastly, it should be noted that the company has made significant advances in curbing it’s spending and keeping an eye on the bottom line. Those of us who were at this years Convention saw evidence of that. With the current details listed in the notes section of the quarterly report just filed, we see more documentation of YTB doing what it needs to do in order to survive. Many of the hard choices made in prior months have proven to be significant, and while time will tell if the elimination of REZconnect will help YTB’s bottom line, the future looks to be significantly better than a single number found at the bottom our financial report.

A major key in YTB’s survival and prominence in the industry is educating those who may be looking for opportunities as the country starts to come out of the current economic condition. With YTB’s new tools and upgrades just announced at Convention, it may prove to be significant in showing the company’s strength instead of weakness.

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Do You ZamZuu?

The annual Power List from Travel Weekly currently ranks YTB International #25 for 2008 out of a record number of agencies this year with 62 companies with travel sales of more than $100 million. All of the agencies in this years Power List faced a common enemy during the latter part of the year, that being the economy. As we are now at the half way point of 2009, many on this years list are not as optimistic as they once were about travel sales and expect a decline anywhere between 15% – 25% between 2008 and 2009.

The economy is one thing, but when a company such as YTB has to endure fear based attacks from a small, yet extremely loud group of critics who desperately need to control free enterprise and exaggerate every move the company makes, is another. With the legal attacks combined with the mud thrown up on the internet via blogs, forums, and message boards, a year over year increase of any amount should show the stability and resolve of our model for anyone who has two wits about them.

Regardless of which side of the fence you reside, the following numbers appear in Travel Weekly’s 2009 Power List.

– 2008 Sales: $424.1 million
– Employees: 317
– Previous Ranking: 26
– ARC sales of $2.76 million
– 85% of sales from leisure travel
– Hosts 92,383 travel sellers
– Owns Rezconnect Technologies Inc.
– Publicly held

True, some spent the last year focused on creating excuses and never gave YTB a chance to survive and/or make this years Power List. Accusations of bankruptcy or being prohibited from conducting business outright started the second claims were filed by the State of California which magically appeared the day before the YTB’s National Convention in August of 2008. Its sad, but some appeared to have missed or simply forgot that there was a legal process that needed to take place. As we’ve seen so many times before, relying on negative speculation rather than facts can damage ones credibility as some sort of expert.

Few have also knocked the legitimacy of the Power List with any excuse they could come up with. It was last years list with a huge jump from #35 to #26 and 84% growth that more than likely had something to do with the desperate pleas posted for anyone who would listen to in order to stop YTB from co-existing with names like American Express, Carlson Wagonlit, Expedia, Travelocity, Orbitz, and Priceline.

With so much press and attention on YTB it’s not surprising that Travel Weekly once again made special note of our company in this years list.

One company that has seen its share of headlines recently is YTB (No. 25), a publicly traded multilevel marketer with and ARC appointment and a reported $424 million in travel sales, most of it through a network of tens of thousands of small hosted, work-from-home recruits.

A source of unending controversy since it first gained national attention a few years ago, YTB recently settled an action brought by the State of California that accused the company of operating an illegal pyramid scheme. Even if YTB succeeds in transforming itself into a franchise operation and fulfilling the other terms of the California settlement, the company is likely to remain a galvanizing force for friends and foes alike.

For the purposes of the Power List, however, only one thing matters: total sales. Although this number is not included in YTB’s annual financial report to the Securities and Exchange Commission, it is consistent with a company statement to the SEC.

“During fiscal 2007, the aggregate value of retail travel services that have been booked by our RTA’s and independent franchises surpassed $400 million”. YTB reported in the statement.

The company has stated that the total represents retail travel sales and excludes revenue from other activities.

Like it or not, YTB continues to make headlines in this industry because YTB is a major player when it comes to actual travel sales. A few clearly don’t understand the difference between gross sales and actual income generated from those sales reported in our SEC filings. If some can’t comprehend that it takes $424 million in sales to generate $27 million in actual revenue in the travel industry, I’d question how much they truly understand thier industry. However, because there’s a very clear and distinct fear surrounding MLM and recruiting, all focus and attention points directly at revenue generated from recruiting compared to income generated from travel. Those of us that can make the distinction between the two revenue streams have understood for years how silly such comparisons are. Why the perceptions between apples and oranges and these fears persists after all these years is a question I’ve long given up asking. 

I couldn’t possibly tell you what type of excuses will come from this years list. You can be assured that like other years, something will be pointed out here that will attempt to question the validity and accuracy of this report when it comes to YTB. In order to come up with these excuses however, desperate critics will need to toss out the fact that YTB is one of very few that are publicly traded companies who answer to the SEC. They will also toss out YTB’s appearance on this list for it’s third straight year. And lastly, the special notes surrounding YTB in Travel Weekly’s introduction, like last year will be completely ignored and the beliefs and opinions of these few critics will appear to some as an overriding and dominant fact, instead of desperate pleas for attention to make all things right with thier own little world.

There comes a time when you should stop and look at the reports such as this and compare them with all the excuses we’ve seen over the years. Demands for clarification or additional questions directed at YTB and Travel Weekly have played out for far too long. Both YTB and Travel Weekly don’t appear to be all that concerned, and continue to stick with the same qualifications they always have despite the pleas and concerns.

Some will continue as they always have because changing thier beliefs would be far too upsetting and create too much turmoil. Others however, will begin to see things for what they truly are. If you’re of the latter, I welcome you to the idea of MLM and Travel as major player in the Travel Industry.

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Do You ZamZuu?

This has been one of the wackiest weeks I’ve seen in some time. I have been rather quiet about spending time with family this week during Spring Break, and have no idea why all this news needs to hit during my vacation.

Late Monday afternoon, I along with hundreds of Directors and Coach’s Corner Members received word that a “tentative settlement” had been reached concerning the California Litigation. News spread very quickly over the internet and the boards that a settlement was pending and the litigation would soon be over.

Critics of this news have been extremely busy trying to distract everyone with rumors of Directors leaving, (2 confirmed) and just this morning I found out that the SEC will most likely get a number of complaints that someone named “Travel Pro” was busy buying up shares of YTBLA.OB based on insider information. (I knew there was something I should have been doing instead of writing!)

The big stink currently is that the Attorney Generals office laid claim there is was no settlement, and would never allow YTB to continue in what it claims is a “gigantic pyramid scheme”.

While critics are holding out hope that YTB will now be punished by leaking news about the “tentative settlement” they had no idea that papers were filed in Superior Court on April 8th at 8:30AM, that California and YTB International have reached a tentative agreement to settle pending litigation by none other than James M. Toma, Deputy Attorney General. The Attorney General’s office asked the court to postpone the trial date to allow more time for the parties to work out final details of an agreement. The state has scheduled a number of depositions for April which would be costly to the state and would prove unnecessary if a final agreement is made.

My hat’s off to Nadine Goodwin of Travel Weekly who decided to go to the source to get credible information via the courts, the AG’s office and YTB Attorney’s instead of just regurgitating what she has read by those who do nothing more that write in order to get attention and spew slanted and unconfirmed stories.

As much as I’d love to slam Jerry Brown right now, I’ll bite my tongue. (As much as possible anyway.) How anyone could say one thing and his office do another really burns me. To now find out that a tentative settlement statement has actually been filed with the courts, by the AG’s office no less, is a point of concern that I’ll save for a later date.

Regardless, the papers have been filed with the courts via Mr. James Toma, and the tentative settlement is still in the works. (Although a little longer than originally anticipated.)

A very important lesson for our everyone involved right now. (Including me by the way.)

Don’t count your chickens until they’ve been hatched.

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Do You ZamZuu?

Are you as tired as I am over all the trash talk about YTB’s stock? Honestly, I’m sick of it. It’s as if YTBLA.OB is the only stock out there that’s down in the dumps. You’ve got to be hiding out in a cave somewhere not to realize that the markets overall are…well, in the toilet.

While the market has many running in fear, others are banking on the fact that the market will eventually turn in an upward trend. Most people would think someone would be crazy to actually be buying stock these days. Yet, that’s exactly what many of the super wealthy would have done in order to make their fortune. It’s times like these that would explain why Warren Buffett bought a considerable amount of stock at the end of the third quarter. (And if you’re thinking he sold a bunch, think again.)

The “Average Joe” simply can’t stomach what’s going on right now. That’s why we’re seeing the selling frenzy that we are, and also why critics appear to be focused on YTB’s stock specifically. It helps give the perception that the company is in dire straights and won’t last. Our third quarter numbers did a significant job is dispelling those rumors after their release. While there is a considerable amount of excuses following YTB’s profitable quarter, it did cause some of the most hardened critics to actually state that the numbers actually turned out better than they expected.

I would assume that’s why the focus has been shifted so quickly to the stock. It’s the one thing critics can point to that doesn’t look all that rosy, nor is bouncing back. The picture they’re painting is as if all other sectors are doing just fine, and it’s only YTB that’s having the difficulty holding on to its price. (Even with a profitable quarter.)

This attempt to spin the stock got me thinking how YTB compares to other stocks, more specifically, the travel sector since YTB of course knows nothing about travel. (Even after our 8 year run in this sector and being named in Travel Weekly’s Power List the last two years.)

By no means do I claim to be some type of stock expert. Far from it. But anyone with a pulse should realize that the markets, even after the election, continue to tank.

After pulling up various stocks to compare with YTB’s I started noticing that the broad brushed picture being painted isn’t what our critics claim it to be. (Big surprise, I’m sure.) Nor did any one sector in our industry lead in the categories I checked. About the only sector I was not able to check thoroughly at this time were other Brick and Mortars. (Most according to the Travel Weekly Power List are privately held.) I also tried to pick stocks that most everyone would know, even if you’re not “in” the industry. (Hogg Robinson Group, being probably the one exception.) Since there were so few public Brick and Mortar Agencies, I did use both American Express and Boeing who do own “Agencies” but obviously have diversification which neither look to either help or hinder their performance over the last year.

Here is an overview of the industry representing Airline, Cruise, Brick and Mortar, and On-line Agencies.

YTB (as noted by the blue dot) ends up pretty much “average” compared to the other stocks in the industry. Since there are so many in this sample, I’ve taken each industry and broken it down into segments for ease of reading.

Our first sector is how YTB compares to the Airline Industry. Companies are color coded and YTB will remain blue. Companies sampled with YTB are Continental, Delta, US Airways, and Northwest Airlines.

Next is a one year snap shot of Brick and Mortar Travel Agengies, which include American Express, Boeing, and Hogg Robinson Group.

Would a one year snap shot of on-line agencies look any better? Take a look at how YTB compares with Expedia, Priceline, and Orbitz.

And our last sector is the cruise industry as we take a look at both Carnival and Royal Caribbean.

After looking at this again, maybe Royal Caribbean should be the one in red…

So what gives? Why all the focus and fuss over YTB’s stock when obviously YTB appears to be on par with all the other companies in the market?

Because that’s what critics do. It’s something for them to talk about to give the perception that the Network Marketing business model is flawed or inferior to what they consider a tradition business plan. It’s all about perception to add fear and doubt about your choice in the industry.

They want you to go back to something more “legitimate” or “secure”.

So let me ask you. When it comes to the stock market, which one of these stocks above look to be more secure to you?

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Do You ZamZuu?

I’ve enjoyed the last couple of days watching the critics swarm around the virtual water coolers on the internet just licking their chops for the third quarter numbers to come out. I checked one of my favorite places and laughed at how anxious they were. It reminded me of a bunch of addicts waiting for some dealer to show up so they could get their fix. It’s been more than 19 years since my last drink or drug, but I still remember waiting with anxious anticipation for THAT car being the guy with my next score.

Imagine their surprise when the dealer ends up being an undercover Cop to bust them.

On what charge you say? Being F.O.S. (Think about it.)

The speculation of course was that YTB has been bleeding money, and Management doesn’t know how to manage the money they have. When news broke earlier in the week over the pending sale of the old Home Office building it was because YTB was in a cash crunch. It had nothing to do with the fact we have a gorgeous new 130,000 square-foot complex to move into. No, we needed the money because our critics were absolutely sure that there would be yet another huge loss for YTB.

Why? Because recruiting is down, and the focus of course (actually “phobia” is a much better choice of words) has always been about the recruiting. Their theory is that if you can cut the recruiting off at the knees you cut the life blood of the pariah that consumes and controls your life.

How I would have loved to see the looks on the faces when critics opened the YTB 10-Q and saw a profit for Q3 of $287,999.

Surprise!

So what went wrong? How could the critics have been so far off base? (Again)

Simple. They don’t have the first clue how a Network Marketing business actually operates and stays solvent. (I’ll even go as far as stating ANY business for that matter.) This quarterly provides proof that it’s not about “recruiting” and the Kool-aid they’ve been drinking is spiked with nothing but rumors, lies and myths.

None of these characters have any actually experience in Network Marketing, and the knowledge they acquire to form their beliefs and opinions isn’t even “book learning” for the most part. Many of the beliefs are formed from the very massage boards and blogs they participate in. The blind leading the blind so to speak, so it’s not at all surprising that everyone ended up looking like dolts.

I don’t know, nor do I care if they’ll ever grasp that the money made in selling travel agencies goes directly out to the field. Every penny of the $449.95 from the sale of a travel agency is tied to the representatives who sold it. If you like that idea, you can join the ranks of YourTravelBiz.com for free by the way. And “free” negates the California complaint according to the letter of the law. But that’s yet another surprise we have for our critics.

The number critics were looking for certainly showed up with a mere 114,614 active RTA’s at the end of the quarter, a decrease of 13% from the previous quarter. Sales of travel agencies were cut more than half, down from 38k in Q3 of 2007 to 15k the current quarter.

So how in the world could YTB show anything other than massive bleeding and negative numbers?

Here’s a quick breakdown of the numbers.

• Online travel store sales increased $1,205,560 or 10.8%
• Monthly renewal fees increased $576,579 or 3.3%
• Travel commissions and services increased $2,478,103 or 44.8%
• Training programs and marketing materials revenue decreased ($1,843,333) or 40.8%
• Other income increased in the third quarter by $590,203 or 52.7%

Net revenues totaled $42,876,354 and $39,869,242 in the third quarter of 2008 and 2007, respectively, a slight increase of 7.5%.

Expenses also increased considerably year over year with the following breakdown.

• Depreciation and amortization increased of 123.0% or $374,274.
• Marketing and selling expenses increased by $825,865 or 152.0%
• General and administrative expenses increased 50.7% or $6,242,058.

So let’s me see if we have this right? We had a decrease in RTA’s, increased expenditures, but increased revenue for a quarterly profit of $288K?

Yep. The numbers don’t lie, that’s exactly what happened and our critics are busy scratching their heads wondering what happened.

What’s so much fun to watch is that after Q2 reports came out, and predictions of up to $6 million in losses bit them in the gluteus maximus, we were told to wait until Q3. Excuses started to emerge just like they are now. The spin and claims now are that none of the additional slander and junk they’ve been spinning has had time to take full effect. The California suit had just been announced, and ambulance chasers decided to get into the action as well to spread fear about the end of YTB mid quarter. Now that those allegations have come up lame these very same people who simply ignored the egg on their face last quarter are looking once again into the unknown. Believe it or not, we’re all supposed to wait until the Annual Report for them to show us they’re right and we’re wrong. How fun it is watching them weasel their way out of yet another speculative blunder.

For the record, I don’t know why they do it. It’s almost as if they like looking like clowns. I think a more accurate description would be that their entire existence revolves around proving their superior knowledge and understanding about any subject of conversation. It could be taxes, travel, ethics, stocks, laws, compliance, you name it. If it’s being discussed around the virtual water coolers on the internet, they always appear to be the guy or gal who’s “in the know”.

And a simple word of caution when it comes to correcting any of them. Don’t. You’ll be called every name in the book, as they attempt to shame you into submission among the other participants. Looking at this intelligently or rationally will have you scorned until you either give up or conform to their way of thinking. My best advice is to just smile and nod in a positive manor and when you turn your back you can then roll your eyes, or smirk and chuckle to yourself how insecure and desperate they are.

So we’ll just have to wait, AGAIN, for the promise of our critics showing us that this model just doesn’t work. It’s flawed because all the money is made recruiting people. When the recruiting dries up like it has, we’re promised that the house of cards we’ve built will come crashing down.

Do you really want to worry about such nonsense and spin? Or would you rather look at the fact that YTB turned a profit under the combined adversity of mud slinging and economic conditions?

The choice is yours.

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Do You ZamZuu?

While I was reading this week, I caught a couple of threads with the infamous “predictions” of what our Quarterly Reports would look like. One fruit cake actually speculated a $6 million loss…for the quarter. It’s one of the reasons I don’t like to put things like this out there, you look like a real ass when reports like ours come out.

Of course we’ve learned that “critics” like this spend all their time promoting negative information and spin, and while the “spin machine” hasn’t gotten into full swing concerning the numbers, I’m quite confident that it will be more doom and gloom. Truth of the matter is; it appears that YTB has curbed some of the spending it could in order to reduce losses from the proposed $6 million, to less the $200 thousand.

There are of course expenses that YTB could not control based on the foundation it put into place back in 2007, such as 135,000 square foot home office renovation that should be complete in 2009. It’s odd how critics who know so much about us Network Marketers like to talk about the Corporate Jet purchased that Coach, Scott, and Kim will escape in when the imaginary house of card begins to crumble. Somehow they ignore the $5.7 million in property and equipment spent this quarter alone which should be a big clue that they Founders intend on staying right were they are. Salaries and benefits increased by $2.1 million, while building overhead increased approximately $900,000 due to the increase in employees and number of locations in which YTB operates.

It’s interesting that Travel commissions and services for the first six months of 2008 increased $5,754,019 or 68.5% to $14,148,444 from the $8,394,425 reported in the comparable prior year period. While travel commission increased, the number of RTA’s has decreased.

This is a very important development, not because “the house of cards” is crumbling as some will probably predict, but because directly correlates to what I’ve been telling everyone for years. Please take note of a line on page 9 of the quarterly report that I’m very happy to see. I have to wonder if this line was specifically intended for a new critic we have?

“Revenues generated from the direct sales of travel are recorded as deferred revenue until recognized in the period the travel departure takes place.”

Meaning, travel commissions are not reported on our SEC filings until AFTER we actually have the money in hand to report as revenue. While the percentage of Marketing Commission (74.5%) and Travel Commissions (19.7%) have narrowed slightly the SEC report now states that recorded revenue from actual sales are not reported at the same time.

Who knew?

Proper knowledge of how our industry works could prove to be a very important element in California. Actually, some in California already know how this works based on the Legislation that went into effect back in January of 2007 when YTB was able to continue to offer credentials after minimum “booking” requirements were met.

Some however, must not have gotten the memo.

Overall, not a great quarter, but certainly not the horrible showing that was predicted. The key is going to be retention as it is with all companies. I do admit, it’s going to be somewhat difficult due to those who don’t verify what they’ll read from the critics. Proper education in just how we operate and what our model reports to the SEC will be key, and I’ll steal a line that our critics like to use all the time.

“The numbers don’t lie.”

Truth be told, they’ve been lying for years, and it’s my hope that when the suit is either thrown out, or YTB is found to be a ligitimate business model based on proper understanding of how revenue is reported, we’ll find out just who has been lying to who.

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Do You ZamZuu?

They finally got me.

I have just been duped – hoodwinked – had the wool pulled over my eyes – what ever you want to call it, busted for not following a “Golden Rule” that I have been preaching here for years. I can’t say that I don’t know how this happened, because I do, and I’ll explain how this scam worked, but quite honestly I’m more than a little embarrassed over what just transpired a few days ago.

First, what’s this “Golden Rule” that I tell you to follow but I somehow forgot?

“Don’t believe a word you hear, unless you can verify it on your own to be true.”

Mistakes happen, and while I’m not sure that either Neal Boortz or Harv Ecker, two mentors of mine who have attempted and obviously failed to pound this into my head, would ever forgive me for such a simple oversight, I’m just going to try to let this one slide under the table, and chalk it up to experience.

I feel obligated however to help you learn from my mistake.

So, just how was I played? How could someone like ME miss something like this? The “sting” stems from the newly released 2007 Annual Report when a couple of days ago, one of the Traditionalists posted a comment on my blog that there were only 366 shareholders of company stock.

I simply dismissed it and told this Traditionalist they might have heard something to that effect, but I could assure them, there were more than 366 stockholders of YTBLA. (Myself being one of them.) Another Traditionalist chimed in that this number could in fact be found in the Annual Report on the bottom of page 9.

Now remember my Golden Rule; “Don’t believe a word you hear, unless you can verify it on your own to be true.” So like a good boy, I opened up the Annual Report and sure enough, there it is.

“As of December 31, 2007, we had 366 shareholders of record of our Class A Common Stock and Class B Common Stock.”

I was dumbfounded to be honest. I know a ton of people in YTB and when the stock was down in the dumps, I got calls, e-mails, and private messages asking me what I knew what was going on with the company stock. I couldn’t honestly tell them anything I knew because, I really didn’t know why. My gut told me that it would rebound, and I’ve learned to always trust my gut.

By the way, I have very limited experience in this type of stuff. Yes, I own stock, and I also have some mutual funds that I have invested in, but for the most part, investments of this type are of a very limited basis. When I tried to purchase this stock a couple of years ago, I went to a Broker who simply wouldn’t in good conscience let me invest the type of money I was talking about into YTB. While I thought this Analyst was very nice and polite, I wasn’t asking him for advice, I just needed a Broker and it would either be him or someone else. (As it turned out, it ended up being E-Trade.)

When I realized that I was only one of 366 stockholders according to what I was told and I thought I was able to confirm, I had a choice to position this as either be a very risky and lucky investor, or brilliant.

Which position do you think I decided to pick? ;-P

But something just didn’t sit right with me. I couldn’t imagine with all the employees at the home office, all the Directors who were vested in stock due to bonuses and many of them had invested early themselves like I did, and all the people calling and e-mailing me in a panic a month or so ago that there were only 366 stock holders at the end of 2007.

It just didn’t add up! (Sorry, had to steal that line.)

With documentation like an Annual Report that’s filed with the SEC, I had to take this as fact. It’s right there in black and white and can’t really argue the point very well now could I? I had seen some of the “Critics” posting on various boards that with only 366 stockholders, manipulation of the stock up or down is very easy to do. Speculation that a couple of Directors had gotten together to drive the price up and then dump it were running amok all over the place. Critics will continue to spread this “Pump and Dump” theory for years to come, trust me.

With all the headlines and focus on the Annual Report about YTB being a Darling, and Stock to watch, I knew that it was Day Traders manipulating the stock price, not Directors, so that spin was extremely easy to dismiss and let go of.

You should too, because it’s complete bunk.

Then yesterday afternoon I got a call from someone cross line to me who I speak with on a regular basis and we exchange what we hear, and most of the time have a good laugh at all the fuss over little ol’ YTB these days.

Then the bombshell came. “Doug” he said, “You know that 366 number that everyone’s been talking about?”

“Yes” I replied.

“That number represents employees at the Home Office not total shareholders.”

WHAT?

Sure enough, I confirmed with an Investment Broker and according to the SEC, the company has to report how many “employees” own stock.

How could I have been so blind to trust a bunch of Critics, Naysayers, Cynics, who’s only mission in life is to “spin”? I actually thought they knew what they were talking about!

So there you have it. How Doug got snookered by the TTA’s and Critics. A cryin’ shame, but I guess it could happen to the best of us.

So the next time you see some “Critic” spout off something as “fact”, please save yourself the embarrassment.

“Don’t believe a word you hear, unless you can verify it on your own to be true.”