new price target by the globe was
Not holding commons, in fact bought more YLO.pr.a and b's down at the levels around .50 to.60
With ylo commons at .13 the conversion on the A's puts thier value at 1.50 +, and the B's higher still.
Hard to figure why the market isnt playing the arbitrage, by shorting the commons and then buying the preferred which convert to commons at better than 50% discount.
I did note that shorts covered over 10 million shares in the 2 week period to feb 15. Most of that on the crooked US otcbb on ylwpf.
This one is not without risk, it could indeed go to 0 , if the company decides to go to ccaa and then restructuring. However , in all the years i have followed bankruptcy plays , i have yet to see one enter bankruptcy a year before any perceived default would happen, and for sure , especially not a company with positive cashflow .
YLO's problem is not that they are losing MONEY! The big loss reported was from a writedown of goodwill, The market sees the company as worth less. They did however earn about .14 a share in the last Q.
The imminent problem is from the debt they accrued trying to grow the business in previous years , and in 2013 there is some question as to whether they can handle ( or delay ) that senior debt.
The common shares are the worst way to invest in YLO 's turnaround should it happen, and in the case of a bankruptcy or reorganization, the suspended dividends on the preferreds will be paid before common shareholders get a penny.
Fact is commons in YLO would likely be worthless and preferred may only get .10 on the dollar for the suspended divvies. My best guess is that we see big dilution in the future, firstly the A and B series being converted ( dilution of about 200 million extra common shares) and then perhaps a private equity financing with warrants , which would raise enuff money to take care of the senior debt.( which could be bought at a huge discount)
However since the preferreds are trading at less than what one years dividend would be, they are by far the best ( and safest) way to play YLO's rebound OR demise.
Short the commons ( lock in sell price at .13 or .14) and buy the preferred A and B series , which locks in your buyin cost at .05 ( via the imminent conversion)
This is from a blogspot, explains it better than me.
Some questions may arise as to the chances of conversion, the ability to short a stock with such a low price as YLO and the chance of a short squeeze. The conversion as stated before is a worst case scenario. It will unquestionably happen unless YLO pulls a miracle and is trading above $2 within the next few months. If such a recovery were to take place, almost certainly the preferred shares would be worth their par value of $25 along with any accrued dividends that would need to be paid out. While losing 1000% or more on the YLO short, you would gain that much more on YLO.PR.A or YLO.PR.B as the price ratio of the preferreds to the commons would move back to over 12 to 1 from the current ratio of less than 6 to 1.
This argument also works similarly when considering the possibility of a short squeeze. First off, the high amounts of YLO short volumes are likely stemming from this very arbitrage opportunity. A sudden spike in YLO's common stock will not necessarily result in a margin call for these arbitragers, especially if they have the common shares in hand post-conversion. Secondly, a spike in YLO's stock price will likely be accompanied by a bigger spike in YLO's preferred shares. While the commons are very liquid, the preferreds are not. The preferreds have dropped more than the common shares in the last few weeks despite outranking them in the event of a liquidation because people were desperate to dump them upon the very unsurprising news of a dividend suspension (anyone who expected the dividends to continue unabated on the preferreds when the effective yields were 50% to 80% were delusional). As YLO's common shares rise, the preferreds will similarly rise to a greater extent as fewer sellers exist relative to the common shares. It's much easier to associate with the preferred shares' par value of $25 or more than it is to associate with an "everything's ok" YLO price which could be as high as $5 but may be at $2 for years to come thanks to the tarnished reputation the company has endured over the last year.
The inability to short YLO common stock would be applicable only to naked shorting. Owning YLO Preferred Series 1 or 2 would be enough to allow shorting of YLO much like the ownership of a security in your portfolio would allow you to write a covered call option on it. You must call your broker to confirm the process since short sales of stocks under $3 can rarely be done electronically which perpetuates the myth that shorting stocks under $3 cannot be done under any circumstance. It most certainly can be done but you likely have to call your broker to do so.
Considering the relatively small obstacles that must be overcome to take advantage of this extremely profitable arbitrage opportunity, all investors are advised to look into the feasibility of this opportunity for their portfolio.
I look back at the trouble when Yellow sold Auto Trader... That should of been a clear sign to stay away right there and I believe ZE mentioned that.
A company selling a huge income asset like that would not do so if they were not in dyer trouble and have more complications to follow. It is interesting to look at that in hind sight and see it for exactly what it is.
I am happy for this forum and seeing how we can get caught up by the hype and have this as an experience to teach us all to be more wise in our future investing.
My motto is stay away from a sinking ship unless you are shorting!
Glad I learned what that was all about from this forum.
Don’t Write that Obituary Just Yet…Print is Alive and Well!
When I joined DAC Group’s research department six years ago, one of the tasks that landed on my desk was to track monthly the number of Yellow Pages directories in print in both the U.S. and Canada. I never gave the task much thought, but the figures recently have been hard to ignore. The U.S. is now at its lowest directory count in over seven years. North of the border, in the wake of Yellow Pages Group’s acquisition of their top competitor, CanPages, Canada’s directory count is nearly a hundred directories less than when we first began tracking in 2003, and more than 150 directories less than its peak over three years ago.
While this may sound like bad news for the industry, it’s not. The directory explosion that occurred during the second half of 2008 made Yellow Pages a bigger business than ever, but it also led to a lot of confusion for the folks who came home to half a dozen directories on their front step. Who could blame them for tossing the extras out or getting frustrated when the one they happened to grab didn’t have what they were looking for?
However, we know that people are still flocking to the Yellow Pages in droves. According to the most recent LSA Local Media Tracking Study, the top print heading, restaurants, still receives over one billion references annually. Sixteen other headings draw over 100 million references each. That’s a lot of shoppers who are ready to buy and actively searching for their product of choice. For many categories, particularly those involving home maintenance and improvement (i.e., pest control, plumbers, electricians, HVAC, appliance repair), DAC Group’s Search Landscape Study, in cooperation with Kantar Media, showed that print Yellow Pages ranked either first or second as the media that consumers reference first when shopping for a product or service. 
DAC Group’s Search Landscape Study also found that 53% of shoppers use search engines first when searching for business information to make a purchase. In fact, four of the top five sources are all online-based.  But the one that isn’t—ranked second overall—is none other than print Yellow Pages. How can this “archaic” method still rank high? Simple—it works.
Over the years, survival of the fittest has taken root, and a once-bloated industry has come back down to size. Many small publishers have either sold off their business or closed up shop altogether. In addition, the recession has weeded out weaker businesses and eliminated advertising budgets for others. The good news for advertisers is that there’s less fragmentation and the directories that remain are more useful than ever. All the top competitors are in one place and shoppers can easily find what they’re looking for. There’s less of a need to spend little bits of money in small directories just to maintain a presence. Instead, that money can be pooled for higher-impact ads in the strongest books in the market and even extended to online offerings.
In the face of negative media reports about the industry’s health, as well as legislation restricting automatic home delivery, it may be tempting to drop print Yellow Pages in favor of other media. However, it only takes a look back to one of the worst economic times in history to see why that could be a catastrophic mistake. During the Great Depression, many advertisers pulled back on their advertising, including cereal maker C.W. Post. At the same time, competitor Kellogg’s doubled their advertising budget. When everyone else was absent from the advertising landscape, Kellogg’s was there and consumers took notice. Kellogg’s profits increased by nearly 30% in the midst of the depression and set the foundation for dominance in their industry for decades to come.
The best news of all for DAC Group’s clients is that no matter which directional media you choose to promote your business, we have the tools to make your advertising successful. We can craft an integrated media plan that fits your needs and ensures that you will be where consumers are shopping. Maybe print Yellow Pages aren’t the right fit for your category, but if they are, rest assured that rumors of their demise have been greatly exaggerated and we’ll be happy to prove it.
-Amy Rybczynski, Marketing Research Analyst
 DAC Group landscape study, conducted by Kantar with 5,000 North Americans in October 2011
ZE has a good point, and yellow will have to deal with their situation... I don't know what the future of print may be, but computers will greatly obsolete as we move on in this technical world. I do however, think that there is some physical respect to this world. But when it comes to looking up a business, you can ask anyone on the street with a phone and bang, you have what you need.
Once the older generation has passed on, our generation won't know what a phone book is. I do Google businesses a lot, and sometimes I do find yellow pages come up in the searches, or sometimes I do use Canada 411, but it isn't hard for Google to establish top marketing presence in the near future as the search of choice or BING that business. Yellow pages can compete however, if they get on top of the search engine business and work from that angle as they do have a valid business establishment, and can make some ground.
If I was Yellow Pages, I would consider this as my lead into the future with the company... Google rocked the world by providing many useful tools for free and making huge money on PPC. Yellow might have to provide free phone directory listings, but make their money on PPC advertising.
I think it is possible but who knows what will happen, it is their business, not mine.