Using Veritas to Construct the "Per…

29-04-2017 Hits:93147 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:84453 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:84367 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:88927 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:87413 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:87228 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:58390 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:86754 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:86378 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:86732 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:93015 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:90359 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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I feel that I have handed this company's transgressions to the SEC on a silver platter (see the latter part of this post). We shall see what comes of it. From Reuters:

Oct 6 (Reuters) - Pre-Paid Legal Services Inc (PPD.N) said it received a subpoena from the Division of Enforcement of the U.S. Securities and Exchange Commission (SEC) as part of a fact-finding inquiry, sending its shares down as much as 21 percent.
The company said the subpoena required it to produce documents pertaining to its Treasury stock repurchase program, American Depository Receipt Shares program and membership statistical information, among others.

"We are also responding to comments received by the Division of Corporation Finance of the SEC pertaining to our Form 10-K for fiscal year ended Dec. 31, 2008 and our definitive proxy statement incorporated by reference therein," it said.

The company, which provides legal service benefits plans through a network of independent law firms across the United States and Canada, said it would not able to predict when the inquiries would be resolved.

Shares of the Ada, Oklahoma-based company touched a low of $41.00 before recouping some losses to trade down $8.21 at $43.52 Tuesday on the New York Stock Exchange. They had hit a 52-week high of $52.79 before the news. (Reporting by Renju Jose; Editing by Anne Pallivathuckal)
This is PPD over the last couple of days.
ppd_sec_inquiry_announcement.png I can't help but speculate that that intraday pop was not a reversal but the PPD management raiding the coporate treasury in an attempt to rasie the price enough to dump the rest of their shares. For those who don't know what I am referring to, this is another "I told you so!". I would like to note that I gave this analysis away for free as a public service. Many pundits confused a bubblicious bear market rally with an error in my finding this company to be what I consider a Ponzi scheme. I cannot control stock prices, but over time they do tend to converge with reality.
See the following:
Flim, Flam, Scam: Would a PPD Ponzi and Pyramid scheme cause your wealth to Scram?
Wednesday, 18 March 2009

Tuesday, 07 April 2009

Friday, 03 April 2009

Tuesday, 07 April 2009

 PPD's latest earnings release is a bit misleading in my opinion as well. Instead of rehashing it myself, reference Robert Fitzpatrick's analysis:

Pre-Paid Legal Services Inc. (PPD) (NYSE:PPD) third-quarter numbers reveal 85 percent of PPD's sales force quits or fails to make even one sale annually; 2 percent of the sales force makes 10 or more sales annually, reports Fraud Discovery Institute Inc. (FDI) . According to FDI co-founder Barry Minkow, "The 2009 third-quarter data released today by Pre-Paid Legal Services further confirm the analyses our expert Robert Fitzpatrick has presented over a two-year period - that of a pyramid selling scheme in ultimate decline."

Fitzpatrick observes the two key indicators, declining retail sales and a growing proportion of revenue sourced directly and only from salespeople (investors

) - not retail customers - are prominent in third-quarter 2009 figures, as they have been in previous quarters.

For the last two years, these analyses of Pre-Paid Legal Services revealed and examined the driver of PPD's revenue, which has been affirmed as a deceptive "endless chain" business opportunity

- not market-based product sales. Fitzpatrick affirmed PPD data as manifesting classic signs of pyramid collapse.

Hard numbers showed declines in recruitment of sales associates, rates of recruitment and membership sales.

Another red flag - the proportion of the total company revenue coming directly from the sales people - indicates that revenue depends on promises of income. At PPD, these promises are tragically false and misleading:

- Of the PPD sales force, 85 percent quit or fail to make even one sale each year.

- Only 2 percent of the sales force makes 10 or more sales per year.

- The mean average income of all salespeople in 2008 was $5.74 per week, before all expenses.

- PPD's 3Q09 data reflect the general spike in recruitment that most direct selling companies have realized as a result of millions of newly unemployed people.

In a USA Today article, president of the Direct Selling Association Neil Offen stated, "... Unfortunately as the unemployment rate rises to 10 percent or higher, we'll be picking up more people who need an income-earning opportunity."

Retail Sales Decline; Revenue Sourced from Sales Reps Grows

Yet, behind the industry-wide spike based on income promises, PPD's retail customer base declined this quarter over the same period last year, and the proportion of new memberships that are actually recruited salespeople grew dramatically.

- Total new memberships - that are not sales associates - declined 7 percent in 3Q09 from 3Q08.

- The proportion of new memberships that are actually new sales associates rose to 43 percent in 3Q09 from 26 percent in 3Q08.

- PPD does not reveal a total Associate count per quarter. However, totaling all Associates recruited in the last 420 quarters shows that newly recruited Associates as a proportion of total Members at the end for the third quarter of 2009 grew from 8 percent in 3Q08 to 10 percent.

At the end of the quarter, the total number of Active Memberships declined by more than 30,000 from the same period last year, and the company reports that membership fees in force decreased approximately 1.5 percent during the last twelve months.

Cancellations Exceed Recruitment

Previous analyses have noted that PPD is unique in the legal services industry for its extraordinary cancellation rates, traditionally viewed as a result of misleading or over-hyped sales.

PPD tracks cancellation with an arcane and obscure "membership persistency rate" which blends both attrition and recruitment. This measure declined in 3Q09 from 73.5 percent to 72.6 percent for the 12-month period.

The hard numbers are these:

- At the end of 3Q08 - one year ago - PPD reported that it had a total of 1,575,893 Memberships.

- Over the next four quarters, ending with this quarter, 3Q09, it reported signing up 552,488 new Members. This would bring a total to 2,128,381. However, the company reports that actual current members at the end of 3Q09 are only 1,505,871.

- Members who canceled their memberships during the last 12 months totaled 582,826 - 30,000 more than the number recruited in the same time frame.

Insider Sell-offs

As reported in the previous quarter and in earlier analyses provided to the public by FDI, PPD manifests another classic sign of a pyramid in decline - the use of company revenue to enhance the private fortunes of the insiders at the expense of the longer term fortune of the enterprise. PPD's total net value is now about half of what it was 10 years ago - yet its stock has been manipulated to its highest point in its history.

Minkow affirms, "In the midst of decline, the company used available funds to buy up stock, driving up the share price artificially, and then insiders have sold off many of their own personal shares at the high prices."

In its latest disclosures, PPD announced that the company used $761,758 to purchase 15,666 shares of common stock at an average per share price of $48.62. In this same quarter, the company CEO, Harlan Stonecipher sold 2,500 personal shares. There has been no insider purchase of PPD stock within the last year.

Note: May 15, 2009, "Direct Sales ..." by Charisse Jones

PPD Sales Associates are also Members. To get the actual number of new retail customers (Members that are not Sales Associates) the newly recruited Sales Associates must be subtracted from the total new Members.

  Lest those who are bearish on this rather scammish company get too excited, listen to Harvey Pitt's advice: