Just Picture It Now: Seeing is Believing…

I started a huge task weeks ago when I promised John Frenaye that I would get his questions answered. ALL his questions. Over the next couple weeks due to the length of this list, I’m going to focus on each of these questions one at a time. My goal here is not only to answer the question, but also point out why this question is even asked in the first place.

This will also be an excellent opportunity and tool for anyone with additional comments about each of the specific questions to get better clarification. Use the comments section to discuss each of the questions in greater detail. I remind you that I learned how to accomplish such a huge task from Brian Tracy and his courses, which teach that you focus on the each task one at a time, focus on the solution, break it down into manageable chunks, and before you know it, you’ve achieved your goal.

It should be a really fun debate, and for those of you in YTB, take this information and documentation and use it. Here are the questions we have gone over thus far.

Question #1 - Why a compensation plan takes 12 pages to define?

Question #2 - How YTB arrived at $226 Million in travel sold for 2006. (Still waiting.)

Question #3 - Why so little of the "training" at the annual convention was for travel. (OK, YTB only believes in training at other meetings. We can let this one go.)

Question #4 - How nearly 150,000 RTAs can pay in the course of 9 months $79 million dollars in website sales, fees, and training; and receive $9.3 million in return. (This is huge...anyone?)

Question #5 - And for those that say I don't get the math, I did not learn how nearly 150,000 people paid in $79 million dollars and only got $64 million in return. (Hello? Anyone? Bueller? Bueller?)

Question #6 - Why it is a good thing to have your top executives selling off stock. (There were no takers on this one, so I am gonna assume that it probably is NOT a good thing as everyone initially thought.)

Question #7 - Why a 3:1 split was a good deal when two of the three shares are worthless. (Thanks to Doug for the most reasonable explanation of this. The split may have been a good deal but with the current value of the stock, it is anyone's guess.)

While doing some research on this topic I found Stock Split Secrets which might interest investors who truly want to take advantage of what happens during a stock split, and it might even help those challenged by making investiments. A stock split from my limited understanding almost always turns out to be a good thing, both in voting, and in money. While I've only ordered this book and have not read it, I wanted to put it out there for eveyone, because in my humble opinion, it looked very informative.

Even though I helped John understand the reality of the stock split, it appears that John hasn’t done an effective job of correcting his information. Like most journalists of the day, when there is something negative to report that makes front page news and a retraction needs to be made concerning what’s reported, it’s buried somewhere on page 22. It’s up to someone else to clean up the mess.

Look at what YTB has had to do time and time again to refute negative claims and images. This has been going on for over a year now, and those that want to oppose our model simply just keep finding creative ways to trash and slander our company and our people. Facts or truth don’t seem to matter when it comes to correcting the wrongs made, and there are far too many to even count at this point. You can however get a good idea by this point in our project just how bad this situation is. We’re now on our seventh question and I’m only one third of the way to completion. The mud slinging that’s thrown around the internet these days has gotten so egregious by those that oppose our company and model that very little (if any) consideration to truth or fact is taken into account. The hope is that if they throw enough mud out there some of it’s going to stick.

It never ceases to amaze me how challenged some people are when looking at facts and figures about YTB. For some reason, they can look at a P&L, Earnings Report, or a stock split from one company and be right on mark. But when it comes to YTB, forget about it.

When looking at this particular question, I have to ask; is there any reason why any company would offer a stock split when one or more of the shares are deemed “worthless”? None that I can think of, but for some reason YTB has come up with the first occurrence in history. If you’re wondering why we are the first, it’s because we’re a Network Marketing company and SEC filings, regulations, and guidelines don’t apply to YTB. (Who knew?) We are lead to believe that if there's a way to dupe anyone out of money, we’ll find a way, no matter how outlandish and unreasonable the notion would be for any other business entity.

So to set the stage of what we are to believe based on this question, YTB stock split from one share to three shares, and two of the three shares have no monetary value what so ever. It’s bad enough that those that oppose our model perpetuate that we are ripping off our RTA’s and Reps alike, but now our investors have been scammed as well.

Last July, YTB stock not only split but also reclassified it’s shares into two classes Class A and Class B. As a result, for every share of common stock they held as of the effective date, stockholders received 1 share of Class A Common Stock and 2 shares of Class B Common Stock. YTB International’s Class A Common Stock is currently traded in the Over-the-Counter (OTC) market and is quoted on the Pink Sheets under the symbol “YTBLA”.

YTB International also has a second class of common stock, Class B Common Stock, which is not publicly traded, as it automatically converts into Class A Common Stock upon sale or other disposition. Stockholders seeking to sell Class B Common Stock must contact YTB International’s transfer agent in order to arrange to first exchange it for Class A Common Stock. Shares of Class B Common stock can be converted into shares of Class A Common stock (1 B share = 1 A share).

Isn’t it interesting that because someone can’t “see” a stock, it therefore does not exist and is deemed worthless?

So your next question might be, why reclassify in this way?

The reclassification has to do with voting rights. Those of us who owned stock before the July split now have better voting power and a larger say in the direction of the company. Each share of Class B stock which no longer publically trades, equals 1 vote per 1 share. Class A stock for anyone wanting to jump on board now would only receive 1/10th of a vote per share. What this effectively does for those of us in YTB is help in ensuring and protecting what we have in YTB from a hostile takeover. Anyone wishing to have a majority vote in the direction of the company would have to purchase 20 times the amount of shares to obtain the majority vote. Since Class B is not openly traded, no one can purchase these shares.

While there is truly no way to protect a public company from being taken over, this reclassification does diminish any chance of a takeover or buyout significantly.

One last question which was not asked in this list of questions, but have been asked before from some very savvy investors who know how splits typically work, that being when a stock splits, the price will usually split as well. More times than not, the stock will dive to half the price, and then rebound to a certain level by investors taking advantage of the price point to get in the game. This didn’t happen with YTB, but instead, the stock remained the same, and has fallen steadily instead.

The price remained the same initially because the same amounts of shares were still available in the open market. As investors of Class B stock transfer their stock to Class A and sell, this puts added shares into the open market over time. Stock price again is based on supply and demand. If there are more shares than buyers, the price goes down. If there are more buyers than shares available, the price goes up. We saw in my last post that we do have one major investor who is dumping shares on a regular basis.

(I find it interesting that all the critics who tried to tell us that it was Coach, Scott, and Kim selling off the shares seemed to have disappeared. Now that they understand it was a Traditionalist, [Michael Brent] who was selling off and profiting, the silence has been deafening.)

If by chance I have not done an effective job of answering your questions significantly, please feel free to visit either our Investor Relations site or you can download an FAQ concerning the stock split here that was provided to investors at the time of the split for additional documentation concerning any questions.

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Doug & Ronda Bauknight
AKA: TravelPro
Travel Agent / Networker
Phone: 678.458.5812

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