MYX CHART, page-99

Hi Krug,

The intangibles affect the balance sheet, not the future cash flows per say. The issue is that the intangibles are not being converting in to profits on the Income statement, so they are being written off as non cash impairments (affecting bottom line EPS). This reduces shareholder equity by producing negative retained earnings, so in effect shareholders are losing value on their investment YoY, because the balance sheet isn't as strong as suggested.

Warren Buffet always suggests ignoring intangibles on the balance sheet, especially when those intangibles struggle to deliver you the profits. If you do that with MYX , you end up with little net tangible assets, much lower than current market cap.

Unless MYX can start producing heavy profits to put some retained earnings on the balance sheet, and build shareholder equity (rather than destroy it), I wouldn't be valuing the company much more than net tangible assets.