The Information They Don't Want You To Know

An interesting document was sent to me today that I wanted to share. It is the S-8 Filing by YTB on November 28, 2007 which for some reason received little fanfare and no press releases from the headquarters. Essentially, the document is the registration statement for the company and was prepared because they were offering their own securities to employees in a benefit program.

What I found interesting was that a lot of what is presented here was diametrically opposed to what was presented at my presentation last week. For instance, I always was under the impression that YTB was not out to compete against traditional travel agencies--who would have thought! Maybe someone ought to let 136,000 RTAs know the truth! I think that this document ought to be required reading for RTAs. I have to think that if I was interested in YTB or a travel MLM career, I would be running pretty fast after considering some of the risks that they acknowledge in this document. Items in parenthesis are my own comments.

• Our ongoing activities may require us to seek additional financing, which may not be obtainable or may be unduly onerous or dilutive.
• Our revenues are highly dependent on website hosting fees received from travel agents and agencies. Fees from hosting websites that we offer to home based representatives make up over 70% of our revenues.
• Adverse publicity associated with our products, services or network marketing program, or those of similar companies, could harm our financial condition and operating results.
• Our marketing program could be found not to be in compliance with current or newly adopted laws or regulations in one or more markets, which could prevent us from conducting our business of marketing online travel agencies in these markets and harm our financial condition and operating results.
• Since we cannot exert the same level of influence or control over our Reps and RTAs as we could were they our own employees, our Reps and RTAs could fail to comply with our policies and procedures, which could result in claims against us that could harm our financial condition and operating results.
• Adverse changes or interruptions in our relationships with travel suppliers could affect our access to travel offerings a reduce our revenues.
• We operate in a highly competitive market and we may not be able to compete effectively. (and listed as a primary competitor) other local, regional, national and international traditional travel agencies servicing leisure and business travelers.
• We may not protect our technology or other intellectual property effectively, which would allow competitors to duplicate our products. This could make it more difficult for us to compete with them.
• Evolving government regulation could impose taxes or other burdens on our business, which could increase our costs and decrease demand for our products.
• Our business is exposed to risks associated with online commerce security and credit card fraud.
• As a result of our operating history in online commerce and the variability that can be experienced by our franchise operations, we are unable to accurately forecast our revenues. (that explains the TW ranking and the Sail-A-Thon)
• We expect to experience significant fluctuations in our future operating results due to a variety of other factors, many of which are outside of our control. (including) governmental regulation.
• Liquidity on the Pink Sheets Electronic Quotation Service is limited and we may not be able to obtain listing of our Class A Common Stock on a more liquid market.
• Our Class A Common Stock has been thinly traded and the public market may provide little or no liquidity for holders of our Class A Common Stock. Purchasers of our Class A Common Stock may find it difficult to resell their shares at prices quoted in the market or at all.
• The exercise of options granted under our equity compensation plans could cause your ownership in our Company to diluted and may decrease the value of your investment .
• We do not expect to pay any dividends to the holders of our Common Stock for the foreseeable future.

So, how comfortable are you with a company like this? August 3, 2007 YTBLA $8.50/share. 139 days later, December 20, 2007, YTBLA $1.07/share. A little over 4 months, the stock is losing an average of 5.3 cents per day of value. In just over a quarter, the stock has lost 87.5% of its value. And in the past two months alone, the biggest drops were (as expected) when YTB finally acknowledged that Royal Caribbean terminated their agreement, and when IATAN revoked their endorsement.

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