Using Veritas to Construct the "Per…

29-04-2017 Hits:87198 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:81118 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:80959 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:85431 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:81931 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:84118 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:55179 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:83376 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:83114 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:83007 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:89258 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:86980 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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Pre-Paid Legal Services, Inc. (NYSE: PPD) announced results for the first quarter ended March 31, 2009. Net income for the first quarter of 2009 increased 7% to $17.1 million from $15.9 million for the prior year's first quarter. Diluted earnings per share increased 18% to $1.52 per share from $1.29 per share for the prior year's comparable quarter due to an increase in net income of 7% and a 9% decrease in the weighted average outstanding shares (the share buyback trick).  Membership fees in the first quarter of 2009 decreased 2% to $106.9 million from $109.1 million for the same period last year (as anticipated, membership fees are dropping – this is the bulk of their revenue base).

Net cash provided from operating activities increased 42% to $29.7 million for the first quarter of 2009 from $20.8 million for 2008 primarily due to higher cash taxes paid during the 2008 period (All you need to do is read this statement slowly to recognize the misnomer. They did not generate more cash this quarter from operations, they paid higher cash taxes last quarter. Normalize the earnings on a pre-tax basis to get a truer gauge of operating performance). During the 2009 first quarter, we returned $13.5 million to shareholders through the repurchase of 422,505 shares of common stock, at an average per share price of $32.05. Why do this when you are losing revenue? Since April 1999, we have returned $420.7 million to shareholders through the purchase of 14.2 million shares, average price of $29.69 per share, and $17.1 million in dividends for a combined total of $437.8 million representing more than 110% of our net earnings during the same timeframe. Now, we all know that they didn’t return $420.7 million to their shareholders. They bought back stock, enabling management to sell into the corporate share buyback. This statement is about as accurate as the “cash provided from operating activities” statement above. At March 31, 2009, we had $52.6 million of debt outstanding and $68.5 million in cash and cash equivalents and unpledged investments.

First quarter 2009 membership fees decreased $2.1 million to $106.9 million from $109.0 million for the fourth quarter of 2008. Associate services revenues increased during the 2009 first quarter by approximately $330,000 to $5.3 million from $5.0 million for the 2008 fourth quarter and associate services and direct marketing expenses increased by $1.2 million during the same period. Wait a minute! Doesn’t that mean that net revenues decreased significantly when your expenses rise faster than your revenues?. Let’s step through this: $330,000 revenue increase is offset by $1.2 million in direct marketing expenses for a grand total of negative $870,000 (this was originally typed as an erroneous $8.7 million - oops on my part). I guess if they word it in a positive fashion, some may actually read it as positive. Membership benefits totaled $36.2 million in the first quarter of 2009 compared to $37.6 million for the 2008 fourth quarter and represented 34% of membership fees for the first quarter and 35% for the 2008 fourth quarter. This went down slightly. Commissions to associates totaled $27.0 million in the 2009 first quarter compared to $31.1 million for the 2008 fourth quarter and represented 25% and 28%, respectively, of membership fees for the two periods. This went down as well, but begs the question as to whether they are compensating members less, which will lead to more membership attrition? General and administrative expenses decreased $772,000 during the 2009 first quarter to $13.4 million compared to $14.2 million for the 2008 fourth quarter and represented 13% of membership fees for both periods. The $772,000 decrease in general and administrative expenses included decreases in employee cost (This serves to confirm my suspicion above), telecommunications and bank service charges which were partially offset by increases in postage, legal expenses and accounting fees.

Notes:

·         Revenues are lower YOY and compared to last quarter.

·         Expenses are actually up if you remove the membership benefits, the cryptic “other” category and associate support, which were both reduced, alluding to the fact that salesperson support and payout schedules have both been reduced. If true, this will lead to higher associate attrition as well as lower membership (customer) retention.

·         Thus, income before taxes increased marginally, but did so on a lower YOY and sequential revenue base. In addition, this was only achieved by paying less customer benefits and reducing employee marketing support and compensation. We are not talking Goldman Sachs or Microsoft here, boys and girls. These guys’ employees weren’t the highest paid, and most strongly supported to begin with. Oh, wait a minute. It appears that they have actually included that cash tax benefit relative to last year in the net operating numbers without segregating it (Net cash provided from operating activities increased 42% to $29.7 million for the first quarter of 2009 from $20.8 million for 2008 primarily due to higher cash taxes paid during the 2008 period). If we back this out, we have what is probably a significant drop in net operating cash generated. It is unfortunate that you have to read between the lines jut to get a clear picture of what is actually going on, but in between the lines I am a readin’.

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