YLO – Useful Email Regarding Tellier’s Actions

Hey Lestat,

I am an abrasive person and personality. Let’s do this.

I noticed that you changed your vote from Stay to Go for Tellier. That’s reasonable. Here is why I think you’re wrong.

1. It is in the company’s best interest and the shareholders’ best interest to send all prices of debt and equity lower in the short term because that will allow the company to kill debt at a faster rate with any given cash flow as well as allow the company to buy back shares at a lower rate. If you are in this for 5-10 years, you win.
2. It is not the job of the CEO to manage stock price and debt prices on a day-to-day basis. The stock market is volatile and unpredictable. Obviously the market is voting that Tellier is going into bankruptcy. A lot of this is likely due to the price chart and hopeless sellers, aka the sellers that look at the price, don’t care about the fundamentals, and then liquidate as they grit their teeth.
3. If Tellier comes out with a plan that is reasonable before they lock in prices to buyback their debt, the price to buy back their debt goes up. Thus, foreshadowing the move in anyway is disadvantageous for shareholders but is advantageous for daytraders.

So, let’s make a distinction here.. is he in it for shareholders or daytraders. All evidence points to me that he doesn’t give a shit about daytraders but there is still no significant evidence that he is royally trying to screw shareholders. As a shareholder, I believe that I have all of the information that I need.

1. The company is not a going concern.
2. The company is strongly cash flow positive and has told me that they believe that they can meet their debt obligations as they come due. I believe that they can re-upp the revolver when it comes due.
3. The company has brought on smart people who are experienced with troubled situations. This is a situation where there is a LOT of opportunity.
4. The rumors of CCAA are just that, rumors. Completely unfounded and you wouldn’t know much about them unless you read message boards on which they are the heat of unpractical discussions. CCAA enables the company to eyeball one creditor at a time and treat the others as unaffected parties by the way.
   1. no need to refinance
   2. out of court refinance
   3. cbca
   4. prepackage cbca/ccaa
   5. ccaa
   6. bankruptcy
   7. The valuation of the company is less than their monthly revenue.
   8. The company is trading at less than 1/10^th their book value.
   9. The company is trading at ridiculous P/E and P/FCF multiples.
   10. The company was able to draw out their entire revolver.
   11. The company can retire debt at a fraction of face value.
   12. The company can renegotiate their debt agreements so that they have more ability to act and take action and retire debt/preferreds/common stock/etc.

So, In summary, it is my opinion that your justification to have tellier removed as CEO is a function of your own personal fatigue. You’re probably frustrated with paper losses and losing scope of reality at this juncture. I can assure you that he is aware that he is working for the common shareholders best interest. IF he was lazy, he wouldn’t have brought in refinancing experts and he wouldn’t have fired the CFO that made the mistake last year. IF he was lazy, he would have already converted various debentures to common shares. IF he was misincentivized, he would be doing a lot of other silly things that I don’t see him doing.

These are my thoughts, they are subject to interpretation and personal bias. I am an owner because I fully expect to sell at higher than what I paid for every share I bought. Even at current prices I am not selling, I do not expect to sell at lower prices unless things change to make me question my intrinsic valuation of YLO. Pessimism is raining supreme. Can you deny that fact?

You have the right to disagree much like I have the right to change my opinion and not tell you or even lie about my opinion. This is just how I see it.

But, it is my opinion that your recent change in bias regarding Tellier Stay/Go is more based on personal fatigue and ignorance of the facts than anything else. Go on with your rebuttal.

Do Not Lose,

Mr. Bradford