Late last week we heard some news, a rising if you will, of epic proportions that would, at the very least, raise some eyebrows, and hopefully open the eyes of many showing that what we have been writing about for a year now is just not about a lousy MLM and its business practices, but the company is ran by someone who has absolutely no idea what he is doing. To your standard MLMer or those they prey on, they could care less. They should care because this company is publicly traded and even though it’s a small company, it should be held accountable and follow the same rules that apply to everyone.
Late Thursday afternoon we got word $EDUC took a dive. Not a huge hit, but because the stock is knocking on its all-time low’s door, a 4% drop was pretty significant. Even more significant was the trading volume. On average the company’s volume is around 10,000 shares give or take. Thursday it was 74,000. What does that mean? The market did not like what it was hearing about $EDUC and there was a ton of uncertainty.
Randall has a new outlet where he talks. Good for us, bad for the company. He realizes his words in his kiss ass club fall on deaf ears these days. Why? That would be because the company has lost well over 8 thousand consultants in the last 6 weeks. Go ask an Usborne Consultant or Randall himself how many consultants he has. I’ll wait.
They told you 28,000 right? Yes, that is what they have been fed by the CEO and the leaders, and they are completely wrong. Every time the company publishes earnings, at the end of publication they give you the Consultant number. No one reads that paragraph at the very end, but I guarantee you they will now, because Randall got called out on it. He thought he could fly under the radar and mention/not-mention the number was somewhere around 20,000. We suspect it will be much lower when the new reports come out. He counts every single person in that Consultant number no matter what he says. That would include people who just signed up to get a discount on books, who don’t even bother trying to sell to others. His sales pitch for the last 18 months has been “explosive growth,” record sales and the new one: growing pains. Sounds like explosive diarrhea to me.
Randall is in big trouble people. And he knows it.
Friday the markets opened and it was an ugly day for $EDUC. From its all time high back in 2015, during the company’s peak, $EDUC broke a new record: a 52 week low of $6.25. For those who are doing the math, that is a 25% drop in 2 days of trading. Volume broke a record too, over 100,000 shares traded. What was in the dark to so many has now seen the sunlight. You hear that Sunshine Pumpers? That’s the sound of a collapse.
So what was it that caused all this chaos, and caught Randall completely off guard, and us sitting around saying “If this is true, someone better have their depends on because they’re going to shit themselves?!”
Seems that someone has been doing their homework on our little children’s book company and what they reveal is damning, to the company, the board, the Consultants, and our good buddy Randall White.
Thursday, an in-depth piece was posted on several investor sites about the business practices of $EDUC, the publicly traded company of Usborne Books and More. This article confirms what we have been telling our readers, and shedding light on issues that Randall thinks he can cover up with his sale pitches and words. It’s an excellent read, no, it’s brilliant. Brilliant in its words and its timing of publication. No one saw it coming, not even Randall. I’m going to try to condense a 25 page report down to the highlights, but I encourage our readers to read the whole piece. The article can be found here.
Here are the revelations:
1. Randall did not go to war with Amazon as he claims. In fact he did not even win. He was playing in a sandbox with the big boys, and the big boys said, take your ball and go home you big baby—the company lost 20% in sales as a result AND guess what! Despite his scare tactics of telling his Consultants if you sell on Amazon you’re terminated do not work. As we have told our readers, every single book you can get from a Consultant, you can get on Amazon. Your spies do a shitty job, Randall. What a makes Amazon as good as it is, is that they can get you what you want in a timely fashion, even in the same day in some cases. So yes, one tends to go to Amazon for their book needs.
2. Facebook parties are not productive as much as they push. They fail to produce a captive audience. In fact, some leaders will tell you they don’t even bother hosting a party unless they have 25 people who are actually online. Newsflash newbies, leaders and directors do not waste their time hosting a party. So when they tell you it takes just one party to be successful, they are lying through their teeth. They have other methods of getting their rewards and overrides.
3. We already touched on Consultants dropping like flies, and we have not seen the final fall out yet. You have to remember this is how the company makes its money first and foremost: getting you to fork over $150.00 for that kit that promises you to make a lot of money. What’s worse is home office is aware we know of this massive Consultant drop off and sent an e-mail late Friday afternoon talking about incentives and payouts which can be read here.
4. Randall in typical Randall fashion made a big deal about purchasing a new building, because according to him they had outgrown their old building. He told everyone this was an excellent deal. Total lie. He made it out to believe he had the ability to lease office space to Joe Blow Copy Machine repairer. No, what he did was sub lease the building back to Hilti and that money only covered the interest and principal on the debt he incurred by purchasing the 23 million dollar building. What he should have done was build a metal building by his lake house and store the inventory there, ohh and take pictures of it. This is not rocket science.. some damn money and stay put in the smaller building. But, he has to be a big shot and it did nothing but add onto his growing debt problems. Investors complained about this debt during his first and probably only conference call back in January. They said he should think about doing something about the land surrounding the complex to bring money in. There’s just one problem with that idea: the land and complex are on a flood plain. Maybe he should open a side business that makes and sells swamp buggies for when it rains so the employees can get to dry land safely.
5. We reported about the IT Headaches and how Randall invested (more debt) into this multi-million state of the art software system. Randall did not like what ByDesign created, and ever since has trashed talked them whenever he gets the chance. We made this post to the leaders public back in January via twitter:
If you do not read anything in this article, it is imperative you read this section titled Dis-Information Technology and Information Technology Problems Remain. You especially want to read what the fearless CEO has to say about his ACTUAL Employees: “You might be surprised, it doesn’t seem very hard to pick a book off a shelf and put it in the box, but this is Oklahoma. So I don’t know if I need to tell you more about that.” If I lived in Oklahoma, and someone told me that they thought or they had the impression that people from the state were not smart enough to pick a book off a shelf and put it in a box, I’d want to punch that guy in the face. And the balls. At the same time.
If all that has been mentioned before is not bad enough, and does not disturb you, let me clue you in on the most disconcerting problem to date: there is evidence that several SEC Reg-FD violations have occurred:
So, for all you who think you are part of the awesome company, who has such a dedicated CEO who takes your calls, e-mails, speaks to you online (part of the scam is to be visible) and presents himself as a good guy and/or a victim depending on the current issue at the company, here’s a little news tip for you: You represent a weasel who has spent his career scamming unsuspecting people out of their money. After all he has told people, “Our concept is a lot of people sell a little.” That’s probably the only honest thing he’s ever said. He also has told people, “Just because you have record breaking sales, does not mean you make a profit.” Investors and current Consultants read that sentence again and let that sink in. He needs people to come back hence the full blown incentive blitz to get people back. People, turn around a run in the other direction.
We know what’s coming next: damage control. It already started with the e-mail to consultants. He wants the Consultant count to go up so he is going to manipulate that number by giving people free access to Order Pro. It was asked on the leader board about the stock drop and what exactly was going on, because they don’t understand how the market works. What you’re going to hear is the stock dropped because of this article posted. A 20% drop at one point in the day is not the result of one article posted on the internet, I’m willing to bet money on that. There has been uncertainty and doubt for some time now. One thing the article did not touch on, but is a MAJOR part of the company’s fluff of their sales numbers is the ability to take out consignment. Randall does not mention consignment sales in his quarterlies or annual reports because it cannot be counted as revenue until it is paid back. What is strange is that the company does not aggressively go after unsold consignment inventory. This would indicate they don’t care about it because it’s possible they logged it as revenue. Look at the sales numbers and you tell me if you think unpaid consignment are in those revenue numbers he reports. Those reports are unaudited by the way.
Lastly, you are going to hear—how dare you go after a company that sells children’s books and promotes literacy? Right church, wrong pew. No, how dare Randall White use people to free market those books, and encourage recruiting other mindless people, playing psychological games in a cult like fashion. If that is not bad enough, he has used social media to encourage people who obviously do not follow the markets to buy his stock, just because he has. He is manipulating his own stock prices by doing so, and he is lying to people doing what is the meanest thing a human can do to another human: providing false hope. People are using money they probably don’t have and buying the stock simply because he says to do so. Again, it’s very cult like behavior and it needs to be stopped.
Randall has a lot of explaining, err spinning to do. The internal chaos going on is not going to go away, because this guy is out of cash. Economics 101: No cash, no ability to run a business efficiently. I don’t care what the record breaking sales numbers say. Unless you have cash to stash, this stock is going nowhere. It won’t ever see its all time high ever again. Do yourself a favor, do not ever take financial advice of the CEO of a company who’s only in it for the money.
One more thing. We really hope Peter Usborne is paying attention to the fact his name is going down in flames here in the US. While we have no idea what the contract agreement is between Randall and Peter, but with only 20% ownership in his own company (can’t even afford to be a majority shareholder) one has to wonder if Usborne can take Randall’s rights away to distribute books in the US. Word is he can, but the details of how and under what circumstance is sketchy. It could be true, it could be a scare tactic by Randall himself telling Consultants: “Don’t let Peter Usborne kick me out and take control of the business.”
Randall, you are not nearly as charming as Professor Harold Hill, but you are in trouble with a capital T, that does not rhyme with P, but rather B and that stands for Bankrupt.
That’s my take. Tell me yours.