Using Veritas to Construct the "Per…

29-04-2017 Hits:82075 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...

Read more

The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:77714 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.

Read more

What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:77284 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...

Read more

Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:82030 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...

Read more

This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:78621 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...

Read more

What is the Value Proposition For Verita…

01-04-2017 Hits:80917 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...

Read more

This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:47800 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...

Read more

Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:79622 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...

Read more

Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:79149 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...

Read more

The Country's First Newly Elected Lame D…

27-03-2017 Hits:79699 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...

Read more

Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:84665 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.

Read more

The Transformation of Television in Amer…

21-03-2017 Hits:81621 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...

Read more

For those who haven't been following my research on PPD, I am continuing to release this research for free because I am really that negative on this company's ethics. For all of those that moan and groan about the research prices, this is your opportunity to potentially have the research pay for itself:

  1. A Scheme Here, a Gimmick There, a Racket to be Found Damn Near Everywhere!
  2. Flim, Flam, Scam: Would a PPD Ponzi and Pyramid scheme cause your wealth to Scram?
  3. Cash Shortage in the Flim Flam Scam?
  4. The Flim Flam Scam is reporting soon, and still buying back stock!

We have incorporated the changes as provided in the latest earnings release pre-announcement. After incorporating the latest membership details and the latest earnings estimates of the peer group as well, the weighted fair value of PPD actually increased to US$19.87 per share from our earlier valuation (but wait, there's a catch - there always is - which I will get to further down the page). Nonetheless, at the new levels, the stock still has a downside risk of 32.8% from the current level of US$29.55.

Following are some of the key highlights of the latest quarter result:

  • New legal membership sales declined 10.8% year-on-year. Total active membership sales declined by 32,091 (the worst metric ever in this company's history) to 1,527,063 in Q1 09 from 1,559,154 in Q4 08. The fall in the active membership would have impacted the membership fees significantly. However, the company increased the membership fees (again, remember they did this last quarter as well, by about the same amount) by 66.6% to US$119.2, from an average of US$71.5 in 2008. While the fee increase has quelled, to some extent, the compression of the membership roll rate, it is destroying the business. As you can see, they are raising prices in the face of shrinking demand. Econ 101 says this is a No-No! It is apparent that although the membership demand is inelastic and demand is dwindling (see A Scheme Here, a Gimmick There, a Racket to be Found Damn Near Everywhere!), management has decided to raise prices (several times) anyway, most likely in an attempt to sugarcoat a dying business.This cannot go on for but so long, and in my opinion may very well be the death knell for this company. I am obviously not the only one with knowledge of this company's operations who thinks so (see share buyback data below).
  • The sharp rise in the membership fees shielded the impact on revenue (membership fees), which still fell by 1.8%.
  • New associates sales declined by 7.5% year-on-year to 23,871 in Q1 08, sequentially down 26.6%. PPD has not disclosed the total active associates, so we have not changed this in the model. If time and resources permit, I may update the forensic model further when earnings are officially released with the 8K. 
Please note that we have not considered the share buyback into the valuation model due to insufficient data.            

By the way, another interesting development that we came across during the quarter was that PPD bought back 422,505 shares @ US$$32.05, repaying (and overpaying with shareholder capital - there goes that Ponzi scheme thing again) a total of US$13.5 million. However, during the same time directors sold 207,600 shares directly into the board authorized company share buyback program (a full 49.1% of the total buyback) at an average price of US$36.21 per share (a full $6.66 over the latest closing price). The directors recovered US$7.5 million from these transactions, essentially an insiders-only special dividend provided off of the backs of shareholders and sales associates.

Now, it should be no surprise that I don't particularly favor this company, and I am effectively heavily short it (yes, by more than a couple of shares). The kicker is that the insiders are considerably more bearish than I am, having sold a whole lot more than I have. I am going to see if I can try and catch up to them! Just wait until the next non-sense M2M, bust bank mark up rally. Just think about it!