Over the past several days, we’ve seen several analysts pile on Yellow Media (TSX: YLO, OTC: YLWPF) with negative opinions. Most of the commentary has concerned the company’s legacy print directory business and whether it will shrink more quickly than the online business (25 percent of first-quarter revenue) will grow.

Tuesday, as its shares hit an all-time low, the company hit back. First, management affirmed the sale of certain assets of its Trader business was “proceeding as planned.” The deal will net the company $745 million in cash, subject to certain working capital and other adjustments.

The comments were apparently made to counter rumors that buyer Apax Partners was backing out and/or that regulatory approval could be more difficult than initially expected. The company also affirmed it will be using roughly CAD500 million of the proceeds for debt reduction, as it stated when this deal was originally announced on Mar. 25.

Second, management reaffirmed it will continue to pay its monthly cash dividend at the current annual rate of CAD0.65. It also affirmed that this amount remains within “the stated dividend payout policy representing between 60 and 70 percent of adjusted earnings per share.”

Finally, Yellow confirmed commencement of a plan to purchase up to 10 percent of its common shares as well as 10 percent of each outstanding preferred stock. That should be immediately accretive to both cash flow per share and net asset value, as the stock currently trades at just 40 percent of book value as of Mar. 31, 2011.

The statements were immediately met with skeptical comments, particularly regarding the company’s ability to ultimately compete in Internet advertising and to sustain its dividend over the long term. These fears were further stoked earlier this month by the resignation of Chief Marketing Office Stephane Marceau to “pursue other career interests” as well as the decision of the San Francisco Board of Supervisors to restrict yellow pages directory distribution only to businesses and residences that specifically request them. Yellow does no business in the state of California.

The result is a high-stakes game regarding who’s right on Yellow. And, as I’ve pointed out repeatedly in recent months, only aggressive investors should be playing.

On the one hand, if management is right this stock is coming back in a big way. My first target for the shares would be upper single-digits.

First-quarter earnings, as I pointed out in the May Canadian Edge Portfolio Update, were solid if not robust. Moreover, there was plenty in the numbers to suggest management is succeeding in converting to an Internet directory company and will be able to maintain its revenue base, cash flow and dividend along the way.

On the other hand, there’s certainly nothing guaranteed about a company with a yield that’s now higher than 17 percent, and which this week hit a new all-time low. Neither is anything sure about any company going print-to-Internet. And Yellow’s share price could well go lower if there are real signs of weakening in its numbers.

As I wrote in the May Portfolio Update, and have several other times before and since, we’re betting against the crowd with Yellow. Despite the losses we’ve seen recently, we could still see some outstanding returns in addition to the hefty income the stock has always provided. However, we could also see further losses.

This is no income investment. It’s a speculation that this company can prove its skeptics wrong. And as I’ve said before no one should own it who isn’t willing to take the risk that they’ll fail. In fact, I have not rated it a buy even for speculators for several weeks.

Until it becomes a lot more clear who’s right in the Yellow debate, we can expect a lot more volatility in this stock, even downside. If that doesn’t sound like something you want to be part of or if you’re really hanging on the ups and downs, you don’t need to own Yellow.

Rather, why not sell and buy one of the other recommendations with far fewer question marks? There will be plenty of ideas in the June issue of Canadian Edge that will be e-mailed to you this Friday and posted at www.CanadianEdge.com as well.

See the June High Yield of the Month for the best new buys. In Brief–always the first thing to read–is my executive summary of the issue.