Well that was interesting. I haven't looked at Yellow Brick Road for six months or more. I'm really only looking now out of idle curiousity because I bought a bunch of bonds issued by Mercantile and I was doing due diligence on them and saw that they'd had a tilt at you guys.
I bought YBR some years ago for 28c after both RAMS and Aussie had been bought by banks and that left the independent broker market wide open. Yellow Brick seemed well placed to capitalise on the opportunity. There were lots of wonderful sounding words from the chairman, and promises of attaining profitability by certain dates. The share price rapidly climbed above 70c. Then it started to decline slowly over time as dates slipped by, and promises were not delivered, and cash squirted out of the company straight into the open mouths of its three major shareholders: Macquarie, Mark Bouris, and Channel 9 (via Pink Platypus). I sold again at 28c and glad I did.
It seemed to me at the time, and afterwards that the value of Yellow Brick Road was completely disconnected from the share price. Macquarie was raking in millions by providing the wholesale products. Bouris was earning a mint as chairman (and still is, I see) and through "director-related entities". Channel 9 were earning a nice little stream through paid TV content and advertising deals.
As far as I can tell Yellow Brick Road has never made a profit, and neither the board nor the executive seemed to have the slightest interest in doing so. They appeared to have done very nicely thank you without having to return any value to their shareholders. I see Macquarie's exit as confirming my view that the bank sees no value in Yellow Brick Road shares; not now, and not in the future. A quick look at the latest remuneration statement also shows that the chairman isn't the least bit embarrassed about all the results he's failed to deliver over the years.
Hopefully your new CEO is making promises with the intention of delivering and earning that salary, rather than just keeping you quiet while sucking madly at the YBR teat.
Good luck to you all, but watch out. This company doesn't reward patience or tolerance.
