RE: Is YLO going to default? The investment believes YLO is in deep trouble because of the change in focus from print to digital media with declining print revenues. Many of us on this board believes YLO will survive and be hugely profitable for investors who are willing to take a chance on it.
Looking at the due dates for the debt, there may have been a problem covering the 2014 MTN's. In my opinion, YLO will be able to repay those notes, especially since they can re-purchase all of this debt below 50c on the dollar on the market.
Really, not too much has changed. YLO is still earning 50%+ gross margin. Revenues still very substantial.
So who is winning and who is losing:
Losers:
- common share holders with diminished SP and lost dividend
- A series perferred shareholders - may be forced conversion
- Pension funds and investment funds where they were forced to sell investments because YLO is now below their minimum investment grade level.
- Those whom have sold out of panic and fear.
Winners:
- Investors with a little nerve to invest in the preferreds (except A series), debentures, and bonds as they are greatly reduced in SP. New investment now pays huge dividends / interest.
- YLO Media... able to now re-purchase almost at will, their debt at market with HUGE savings.
I am not suggesting you buy more bonds, but looking at this way, the bonds are very likely to be paid in full when due and any new investments will be at a huge discount to the original investment issue and still pay interest on the original amount. In other words, a higher yield.
Yes, there is increased risk as percieved by the market, but YLO will probably survive. This is a situation hedge funds love!