| Pages: [1] 2 :: one page |
|
|
| Author |
Topic |
TornSoul
    |
Posted - 2006.06.07 20:11:00 -
[1]
Edited by: TornSoul on 07/06/2006 20:16:42
www.BIG-EVE.com/BMBE
This is the fourth BMBE shareholder report.
- IPO #2 status
- May dividend
- June forecast
- Dividend payout model
- Defaulted loans model
IPO #2 status
For the past month the BMBE IPO #2 has been running.
Like with the first IPO, not all shares have sold.
It seems the last ~10% is always a problem...
As of this report, BIG has nominally bought the remaining shares, thus ending the actual IPO #2.
The shares will however all be put straight back on sale, via the EGSE.
The total value of all 2000 BMBE shares are 101.44B ISK.
Which is the ammount available for loans.
May dividend
May dividend : 3.32B ISK
This equals to 1.66M ISK per share
In the BMBE Shareholder report #3, the May dividend was forecasted to : 2.8B
So a sligth increase, which is due to new loans made with the ISK raised from the 2nd IPO (which was not available at the time of the forecast)
Dividend has been paid out as of this writting.
Please note it has been done in two tempis - As the ingame interface doesnt allow for such a large amount to be paid out in one go (duh!)
June forecast
The forecast is based solely on the profit of existing loans.
June dividend forecast : 4.24B ISK
Which equals 2.12M ISK per share
 BIG Lottery
[u |
TornSoul
|
Posted - 2006.06.07 20:11:00 -
[2]
Edited by: TornSoul on 07/06/2006 20:18:49
Dividend payout model
In the BMBE IPO #2 thread, there has been a lot of discussion about the current payout-model (how the total BMBE profit is distributed), and new ones have ben suggested.
Currently the BMBE profit is divided with 50% for the BMBE and 50% for the shareholders.
A 40/40/20 model has been suggested.
That is, 40% for the BMBE, 40% for the shareholders and 20% re-invested in the BMBE (ie. more ISK for loans)
The main object of this model beeing to
1: Over time, make more ISK available for loans without new IPO's.
New IPO's will still be needed, but they will at least be spaced apart more.
2: To increase the value of the shares.
Theres two ways to look at this
- As more ISK becomes available for loans, the (potential) dividend payout increases - Thus making a share more attractive, and thus increases in value.
or
- The value of a share equals the total value of the BMBE (ISK available for loans) divided by number of shares.
Thus by inputting more ISK into the BMBE the share value increases.
This particular aspect ofc only becomes 'real' in case of a liquidation of the BMBE.
I'm very much in favor of this model - and would like to see it implemented.
I have the mandate to simply do so (as the shares are non-voting), but feel that it in this case would be appropriate to actually put it to a shareholder vote, as the current shares are bought under the assumption of a 50/50 split of the BMBE profit and not a 40/40/20.
If approved, the new 40/40/20 model, will howver not be used until next month (ie. for the July payout), as I feel the BMBE needs to 'stabilize' a bit (for a month) after the 2nd IPO has closed, before making this change.
So - The June payout will still be with the 50/50 model, and (if approved) the July payout will be the first to use the 40/40/20 model.
BIG Lottery
[u |
TornSoul
|
Posted - 2006.06.07 20:14:00 -
[3]
Edited by: TornSoul on 07/06/2006 20:19:30
Defaulted loans model
We sadly have our first defaulted loan (with t2 BPO's as security - RIFL/RISP loans)
RIFL/RISP loan where not originally part of the BMBE model - And an aspect of the effect on a defaulted RISP/RIFL loan has only just occured to me...
When selling of the prints to re-gain the ISK for the BMBE - The prints can be sold at either more or less of what 'they should' (covering the loan)
Hopefully more ofc - But with t2 prints you can never be 100% sure, which was the original reason for not including them.
In my original design for how to deal with this, I stated that
Profit from defaulted loans will be paid out as dividend in the month they are realized - As opposed to the month where the loans default.
This ofc also implies that any losses would be handled the same way (this was not specifically stated, as it was pre RIFL/RISP loans, and thus not a real possibility as such)
I've however come to think that this is the wrong way to handle it.
Any change (positive or negative) is in fact a change in how much ISK the BMBE has available.
Ie. 10B ISK gets 'transfered' into BPo's - Which then in turn gets transfered back into "10B ISK +/- some amount".
It really has nothing to do with dividend at all - But simply with how much capital the BMBE has available.
And as such - it ofc has a long term effect on the dividend payout as less/more available capital equals less/more potential for intrest in loans, and thus dividend payout.
So as per this shareholder report, this is how defaulted loans will be handled.
Ie. the change in sell price, compared to the loan they where used as security for, will be a change in how much capital the BMBE has available for loans.
The 'good' (very much a matter of PoV  thing about this defaulted loan is that the BMBE now again has some ready ISK at hand (once the BPO's have sold) and thus a 3rd IPO has moved further into the future.
This concludes the 4th BMBE shareholder report
BIG Lottery
[u |
Verite Rendition
|
Posted - 2006.06.07 20:36:00 -
[4]
Wow, I can't believe someone defaulted on a T2 loan, that's a lot of cash to lose assuming the 75% valuation is anywhere close to correct. What BPO was it?
----
AUS Corp
Lead Megalomanic |
Jannis Detari
|
Posted - 2006.06.07 20:37:00 -
[5]
Payout #1 2.000.000.000,00 isk
Payout #2 1.320.000.000,00 isk
Total 3.320.000.000,00 isk
Vote created,
Option 1: 50/50 Split
Option 2: 40/40/20 Split
you have 7 days to vote, please do so.
Thank you to the shareholders for your participation.
|
herot
|
Posted - 2006.06.07 20:41:00 -
[6]
Edited by: herot on 07/06/2006 20:44:47
Thanks for the report TornSoul.
Sounds like a very promising future over all I think.
And I must agree this new way of handeling defualts that you discribe sounds much better. The same applies to the new suggested split of profits, an increase in capital is never wrong.
Edit: Spelling
 |
Baun
|
Posted - 2006.06.08 03:32:00 -
[7]
someone suggested that it would make more sense to do a 40/30/30 or a 40/20/40 (Dividends, BMBE profit, Reinvestment). The idea is that the BMBE might see a certain profit level as acceptable and funnel all other profits from their share back into reinvestment.
I doubt this would happen knowing TS, but 40/30/30 makes more sense to me than 40/40/20 as only about 500m goes back in each month. It will take a while for that to add up to a sizeable amount to loan. Shareholders who fronted the money would NEVER vote to decrease their share more than the bank's to further reinvestment but it would seem that BMBE (as a small collection of people, very small if I am right) is in the position to do so and in so doing really increasing profit in the long run.
If BMBE moved to 40/40/20 for several months how much more available capital would there be?
If BMBE moved to 40/20/40 for several months how much more available capital would there be?
If BMBE moved to 40/30/40 for several months how much more avaialble capital would there be?
If 40/40/20 is insufficient (combined with defaulted loans), then it seems like the BMBE staff has a decision to make.
Should BMBE continually issue new IPOs where it is forced to sacrfice its profit to buy the remaining ~10% of shares? Or should the BMBE simply give more money back to reinvestment so that its profit expectations increase more in the long run?
The latter would seem to make more sense for everyone involved since current shareholders dont want their stake diluded.
The Enemy's Gate is Down
|
Mr Ratty
|
Posted - 2006.06.08 07:02:00 -
[8]
Edited by: Mr Ratty on 08/06/2006 07:04:56
 Quote:
If BMBE moved to 40/30/40 for several months how much more avaialble capital would there be?
If you can make this one work i'd for for it, 110% out of 100 LOL
Meanwhile back in the real world, of the 2 options, i vote 40/40/20.
About the T" BPO, if you loaned isk to 75% of it's value, i'd vote for the extra to be added to the loan pool rather than dividends, it's beetter for us in the long run.
Might also be an idea to offer defaulted BPO's to shareholders for a week prior to public sale, a perk of investment :)
P.S. welcome back torn
<><><><>
Freelancing Corp |
Cervalan
|
Posted - 2006.06.08 12:32:00 -
[9]
Edited by: Cervalan on 08/06/2006 12:33:06
wb TS.
Nice to see the report and I'll vote for the 40/40/20 split. Retaining earnings is a demonstrated way of inproving profitability long term.
Just for laughs, I did a 'back of the cig box' calculation of P/E for May of 31.3. A little high, more like a Dot com. In June, based on the forecast and the share price remaing the same, it drops to 24.5, still high but given that this is a completely new idea, bearable.
If we used a more traditional model we'd get a P/E of 2.6 and 2.04 respectively! So the shares would be grossly undervalued so buy, Buy, BUY!!)
------
Economics 101 for the hard of thinking.
Hazlett Economics in 1 lesson
Rothbard Economics |
Baun
|
Posted - 2006.06.08 16:10:00 -
[10]
Originally by: Mr Ratty
Edited by: Mr Ratty on 08/06/2006 07:04:56
Quote:
If BMBE moved to 40/30/40 for several months how much more avaialble capital would there be?
If you can make this one work i'd for for it, 110% out of 100 LOL
Meanwhile back in the real world, of the 2 options, i vote 40/40/20.
About the T" BPO, if you loaned isk to 75% of it's value, i'd vote for the extra to be added to the loan pool rather than dividends, it's beetter for us in the long run.
Might also be an idea to offer defaulted BPO's to shareholders for a week prior to public sale, a perk of investment :)
P.S. welcome back torn
obviously i meant 40/30/30 don't be cheeky.
The Enemy's Gate is Down
|
|
Barbicane
|
Posted - 2006.06.08 18:15:00 -
[11]
This is looking very promising so far. I've put down my vote for the 40/40/20 method. Not that it matters much since I only have 0.5% of the shares but I will see if I can't pick up a few more from EGSE . The suggested 40/30/30 method might work later on when the business is on well on its way and doesn't need so much work from TS. It could perhaps be the implemented in a couple of months, in combination with another stock emission.
When can we expect the next shareholder report / dividend payout?
I fully understand that RL interference, e.g. vacation or illness may get in the way but it's nice to have a date to aim for. And if it's late for some reason it would be great if we could have some notice. All it takes is a post on this forum saying the next report will be delayed for a week (or a month, or whatever).
|
TornSoul
|
Posted - 2006.06.09 17:24:00 -
[12]
Originally by: Barbicane
When can we expect the next shareholder report / dividend payout?
The goal has always been to release shareholder reports the first weekend of a new month.
BIG Lottery
[u |
Shimpu
|
Posted - 2006.06.09 23:52:00 -
[13]
I just REALLY hope there's no bi-monthly IPO to raise new capital. My intention to invest into BMBE wasn't because I want to get a monthly divident but because I want to sell the shares at a later date with a (hopefully) big profit. With the curent model (50/50) and even the (40/40/20) model + the flavor Tornsoul argues, it looks like the plan is just to build more and more capital to lend. But if this is done by issuing new shares all the time there's no increase in value per share and no chance of getting a profit out of existing shares. Unlike everyone else in this thread I'm somewhat disappointed with the performance and the path BMBE seems to take.
Originally by: Seleene
This is what happens when you eat the red M&M's
|
Baun
|
Posted - 2006.06.10 04:23:00 -
[14]
Originally by: Shimpu
The interest of the manager should be to increase shareholder value and working capital to increase the success of the business. 40% or 50% seems ridiciolous with the changed business model (no micro management, smaller staff, only few customers at a time)
Thats my take on it as well. The BMBE staff obviously has a non-neglible amount of work but I would love to get 3 billion isk a month for managing the production of ~10 BPOs and transferring some isk.
With the new way all of the isk is loaned out (I.E with VERY SIMPLE recollection on defaulted loans and no need to gather stuff from around the galaxy), an equal share with those who fronted the cash now seems more than a tad bit unrelastic.
The Enemy's Gate is Down
|
TornSoul
|
Posted - 2006.06.10 21:33:00 -
[15]
Re-reading the above, I can see I might be 'comming down' a tad to hard on you guys.
But it simply irks me when someone uses arguements to the effect of telling me just how much ISK I'm allowed to make.
Especially when I've been completly honest and forthright (not hidding it away in some obscure paragraph) about it from the get-go.
And *especially* when I've already reduced it by 20%!!! (once the vote passes)
So there...
BIG Lottery
[u |
TornSoul
|
Posted - 2006.06.10 21:33:00 -
[16]
First of - The rules by which the BMBE is operated, really shouldnt come as any surprise to anyone.
It has been posted to excruciating detail more than once (launch of the BMBE and each IPO)
So comming here and complaining (dare I say whining in some cases even... ) about especially the profit splitting, is neither here nor there.
If you dont like it - Dont buy shares. Simple as that really.
And who are you to judge what my time is 'worth'... Seriously...
That said - We have already announced that there will be a change regardless of this (if the vote is succcesfull).
Originally by: Shimpu
With the curent model (50/50) and even the (40/40/20) model + the way Tornsoul argues, it looks like the plan is just to build more and more capital to lend.
Err... Yes...
Why on earth wouldnt we if the market is there???
Originally by: Shimpu
But if this is done by issueing new shares all the time there's no increase in value per share and no chance of getting a profit out of existing shares.
Uhm... No offense, but the last IPO did just that in fact (increase the value of the shares), as they where sold at a higher value than before.
So perhaps you should in fact instead *wish* for more IPO's (as those will do excactly the same)
Originally by: Shimpu
In my opinion, it should be 40/20/40. Stop new IPOs after IPO 3. No more IPOs would increase demand for shares and the 40/20/40 model would be more efficient to build up capital for BMBE. Why does the manager only get a 20% share? Because it's enough
Stop after the 3rd IPO?? Why after the 3rd? why not after the 2nd, or the 5th?
The 'business rules' for when new IPO's are issued are clearly described, if you dont like them, why did you buy shares?
"Because it's enough "
Say's who?
Originally by: Baun
Originally by: Shimpu
The interest of the manager should be to increase shareholder value and working capital to increase the success of the business. 40% or 50% seems ridiciolous with the changed business model (no micro management, smaller staff, only few customers at a time)
Thats my take on it as well. The BMBE staff obviously has a non-neglible amount of work but I would love to get 3 billion isk a month for managing the production of ~10 BPOs and transferring some isk.
Well - Why dont you then?
Thats the catch aint it
I'd love making billions each month producing Hulk's as well - But why dont I?
My point beeing - Complaining about how much ISK other people make is... well... Kindergarden envy...
Originally by: Baun
Its really not acceptable to continue to raise capital through new IPOs.
Really? Why is that excactly?
When all ISK from a new IPO is lend out - Old (before the new IPO) shareholders will get *excactly* the same amount of ISK paid out.
Ie. the impact will be *zero* to old shareholders.
And the more IPO's that gets done, the less will the 'transition phase' (time until the newly raised capital gets lend out) impact dividend payout.
This (and more) has been described in detail already - Complaining about it after having bought shares is a bit silly imo...
Originally by: Baun
If 20% is all that is agreed to then it will take FOREVER for a meaningful amount of new capital to be added unless
Yet - But it's still better than nothing, aint it?
Which it what it is atm (until the 40/40/20 vote passes).
I'm all for discussions about ways to improve the BMBE, but I can not take it seriously when the arguements are accompanied by "the management fee which appears to be realtively out of whack."
It reeks of "your pile is BIGger than mine. It aint fair. Gimme some" (kindergarden envy...)
Originally by: Baun
new IPOs which do NOTHING to increas e the value per share or help the shareholders.
Wrong - As already explained above, new IPO's in fact 'artificially' increase the value of shares.
BIG Lottery
[u |
EMFi Manager
|
Posted - 2006.06.10 22:06:00 -
[17]
TS I love you and you know it ;P
I think what we are talking about it secondary interest markets (I think )
Interest is determined by available isk that is for loan, the return the people loaning it out want on it and the amount of interest people want to pay on capital.
Basically at the current interest rates you are complaining the loaners are lining up, and at the same time the people wanting to give up isk for loans (people that are buying BMBE shares) are thinning out.
This of course has to do with the 50% (or 40%) management fee.. which is fine.
Loaner pays 2.5%-3.5% / week.... Investor gets 1.25-2.1% / week IF all is loaned out.
Since you already told us if the loan pool runs dry you will be releasing more shares, but at the same time you can't satisfy the amount of loans requested or raise the isk we are in a bit of deadlock.
We could keep demand steady by keeping the 2.5-3.5% but to make sure that supply stays stead as well it would mean decreasing management fee (which you are sort of doing from 50% to 40%) and this may result in a balance of supply and demand of isk.
We could also put pressure on the demand of isk by increasing the interest by 1 point. Giving the suppliers of isk 1.75-2.7%. which would increase supply of isk by more people wanting to buy in on new IPOs.
I think it is perfectly fine to run more IPOS as long as there is supply of isk to pick up those shares and enough demand for isk by the loaners at the interest rates.
I think we are trying to state/conclude that with the current interest rates offered and the current management fee. The supply and demand of isk is out of balance.
I invested a great deal into BMBE, and I received about a ~3% ROI which, given the fact that most isk has been loaned out and there is a huge queue of loaners is quite poor. I know this is also partly of BIG buying up the remaining 15b of shares just before dividend date (pushing my divvy down with 15%) but still :P
No one is blaming you for what you are doing... but if no one is buying the IPO#3 shares @ 53m (or whatever) because the 1.6m / share isn't enough incentive to put the isk through BMBE it isn't going to be as successful and it is gonna make your venture hard and you will limit your profits.
So what I would like is for you to explore playing with the numbers (2.5-3.5% interest, and management fee) so the ROI of BMBE for shareholders becomes competitive (5.5-6.5%) given an average loaned out sum...
The last issue I would like to point out.. is that the original IPO investors are being hurt, and if you are doing 1 IPO each 1-2-3 months the spreading out of the old profits over a larger investment pool which isn't fully lend out yet will have a perpetual negative impact on our investment results as well...
Anyways, good luck in these tough & critical times!
Alt of Naphtalia
EMFI General IPO is CLOSED! |
EMFi Manager
|
Posted - 2006.06.10 22:10:00 -
[18]
Originally by: TornSoul
Especially when I've been completly honest and forthright (not hidding it away in some obscure paragraph) about it from the get-go.
And *especially* when I've already reduced it by 20%!!! (once the vote passes)
TS, I don't think people are questioning greed, or how much you are allowed to make, but critizising economics... (as described in my post) ever increasing loan pool will put presure on the interest market.. and therefore hurt the suppliers of isk vs the loaners... fixing interest (half a point may be ennough) or management fee would balance supply and demand issues...
Alt of Naphtalia
EMFI General IPO is CLOSED! |
TornSoul
|
Posted - 2006.06.10 22:17:00 -
[19]
Originally by: EMFi Manager
TS, I don't think people are questioning greed, or how much you are allowed to make, but critizising economics... (as described in my post)
Thanks for your post - Well found arguments based solely on the economics of things I can relate to.
BIG Lottery
[u |
Rthor
|
Posted - 2006.06.10 23:03:00 -
[20]
I think that you will find that if your investors are not happy with their returns then it will make zero difference to them if you think that you were completely forthright with them about whatever. They invested in this because of your name and reputation. And if this venture becomes disappointing to your investors then the whole business plan, whether you realize it or not, would have been to monetize the Big and Tornsoul names. If you do not want to sell/lose your rep it would be in your interest to reduce management fee much more so at least you can say "hey you did not make zillions but neither did I." If on the other hand you will make a lot of money and your investors will not then you screwed yourself out of this game.
If you are not careful and knowledgeable in the area of appraising these prints then the end result could be, in an extreme but I think reasonably likely case, you being out of funds to loan and instead holding a library of mispriced prints. This is where new IPOs will give you an illusion that everything is still fine even when you are holding bad loans because you keep on getting new capital to invest through IPOs. But at some point demand for these IPOs will stop if returns to shareholders are not adequate and investing with you starts to lose its appeal as your rep deteriorates due to poor results.
Also if the value of these prints crashes at some point for whatever reason then nobody will repay their loans and your capital will disappear. I dont think that the dividends compensate adequately for the risk of this loss at all, and yes the size of the management fee greatly affects the rate of return so you cannot say that you dont care about arguments that mention the fee.
So I think that your investors are risking quite a lot while you dont really risk so much other than your name. With this in mind you may find it that reducing your management fee by a lot may give you the goodwill that you will likely need while you still get to play with this toy/experiment.
|
|
Shimpu
|
Posted - 2006.06.11 01:41:00 -
[21]
Edited by: Shimpu on 11/06/2006 01:43:42
Originally by: TornSoul
Re-reading the above, I can see I might be 'comming down' a tad to hard on you guys.
But it simply irks me when someone uses arguements to the effect of telling me just how much ISK I'm allowed to make.
Especially when I've been completly honest and forthright (not hidding it away in some obscure paragraph) about it from the get-go.
And *especially* when I've already reduced it by 20%!!! (once the vote passes)
So there...
Tornsoul, it's not kindergarten envy and it's not about me not willing you to have big profits. It's your idea and you started a business from it. It's genuine so far. Kudos for that!
At IPO 1, I just invested because you have good reputation and I had (and have) faith in your business endeavours. Well, the business model didn't work but I still had faith in you. You adapted the business plan and now there's huge potential in it. I continued to invest at IPO 2 because the blueprint business is money intensive. Without a critical mass of money to loan, there's not much to do...
But don't you see that with a IPO every 1-3 months, there's no real gain in value per share? The BMBE business itself get's more money and more profit through new IPOs, but the shareholder doesn't participate in it (apart from the low dividend). You in contrast greatly participate whith each IPO. With steady IPOs, there's no market for shares sold by shareholders either. It's like you have the monopoly to make profit from selling shares... I think that's not good.
If there's more market demand than capital in BMBE, just raise the interest rates. Don't do new IPOs. Only you are participating from new IPOs... in fact you harm the shareholder with new IPOs :(
Quote:
But it simply irks me when someone uses arguements to the effect of telling me just how much ISK I'm allowed to make
Shareholder 'Joe Doe' holds 1% of BMBE. This is 1 billion isk. The dividend for the current month for him is ~ 32 millions.
TS & associates get 3.32 billions.
Now imagine IPO 3. Another 50 bill in capital injected. 'Joe Doe' doesn't invest this time. Projected revenue equals ~ 6,5 %. This is 8,8 billions revenue. 50/50 means 4,4 billions for Tornsoul and 4,4 for the shareholders. Since 'Joe Doe' after the new IPO only has 0,66% of the shares, his dividend stays exactly the same (32m)... and since the business model is about new IPOs whenever working capital is tight he can't even sell his shares with profit (well, apart from the premium put on top on every IPO...)
Sorry, but this just looks wrong!
With a model like 40/20/40 or 50/20/30, there would be huge demand for shares on the free market and for new IPOs aswell. Especially with the 50/20/30 model, the shareholer would actually get more and more profit from his shares, regardless of new IPOs. You could do your IPOs (big profit for you every time!) when demand is still skyrocketing regardless of raised interest rates and the shareholder would still get a steady increase of profit and value from his shares...
1. Less IPOs - raise interest rates instead for as long as possible
2. Less management fee (20%)
3. Less shareholder dividend (40%)
4. Introduce BMBE capital buildup from the monthly revenue of BMBE (40%)
5. *win eve*
Sig dimensions must be no more than 400W x 120H - Cathath (mods@ccpgames.com)
Originally by: Seleene
This is what happens when you eat the red M&M's
|
TornSoul
|
Posted - 2006.06.11 03:50:00 -
[22]
Originally by: Rthor
I think that you will find that if your investors are not happy with their returns then it will make zero difference to them if you think that you were completely forthright with them about whatever.
The point beeing that they have had all the oppertunity in the world before investing to inform themself as to how the profit is beeing divived.
Complaining about this after buying shares simply doesnt wash with me.
Dont like it - Dont invest.
Originally by: Rthor
They invested in this because of your name and reputation.
I really really hope that my good name and reputation is not the sole reason for anyone investing.
While a great compliment thats just folly.
And it also makes me feel much at unease as well... As it (such 'blind faith') puts an extra huge burden on me, that I'd rather be without...
While I (perhaps more than others?) try very very hard no to invent ISK loosing ventures - I'm definatly not infallible. Which was nicely demonstrated with the first few months of the BMBE I'd think...
Originally by: Rthor
If you are not careful and knowledgeable in the area of appraising these prints then the end result could be, in an extreme but I think reasonably likely case, you being out of funds to loan and instead holding a library of mispriced prints.
Which is ***excactly*** why I didnt want to do it in the first place...
Originally by: Rthor
I dont think that the dividends compensate adequately for the risk of this loss at all
Then dont invest...
Originally by: Rthor
you cannot say that you dont care about arguments that mention the fee.
Thats not quite what I said.
I dont care about "You cant make that much ISK for that little work" arguments.
I do care about sound business objective arguements (like presented by EMFi Manager)
Theres a difference.
Originally by: Rthor
So I think that your investors are risking quite a lot while you dont really risk so much other than your name.
There you go again (well not you in particular) - Judging what my name and time is worth.
You cant possible be the judge of that.
And for what it's worth (imo) - BIG's and my good name are worth lots lots more than what any single investor sofar has invested in BMBE. Literally.
So excactly who is not risking alot...
BIG Lottery
[u |
TornSoul
|
Posted - 2006.06.11 04:18:00 -
[23]
Originally by: Shimpu
Tornsoul, it's not kindergarten envy and it's not about me not willing you to have big profits. It's your idea and you started a business from it. It's genuine so far. Kudos for that!
At IPO 1, I just invested because you have good reputation and I had (and have) faith in your business endeavours. Well, the business model didn't work but I still had faith in you. You adapted the business plan and now there's huge potential in it.
Thank you very much for the kind words.
Originally by: Shimpu
But don't you see that with a IPO every 1-3 months, there's no real gain in value per share?
Thats not true - As new shares will always be issued at a higher value.
Originally by: Shimpu
With steady IPOs, there's no market for shares sold by shareholders either.
I absolutly agree with this.
A new IPO every month (or close to) is detrimental to share trading in general.
I on the other hand think that the long term benefit of increased capital for the BMBE overshadows this.
But yes we agree that it's preferble to not have one IPO straight after the other.
Originally by: Shimpu
Only you are participating from new IPOs... in fact you harm the shareholder with new IPOs :(
The 'harm' to shareholders is short term - and has very detailed with examples and all been put on the table from the get-go as something that would invariably occur every now and again.
And the conditions for it happening likewise.
We had this whole debacle at the begining of the 2nd IPO as well.
Current shareholders dont like new IPO's as it shortterm (until all new ISK has been loaned out again) hurts the size of their dividend.
And if current shareholders had their say, its very unlikely that any new IPO's would ever happen.
Which (among other things)is why the shares are non-voting shares...
Originally by: Shimpu
since the business model is about new IPOs whenever working capital is tight he can't even sell his shares with profit (well, apart from the premium put on top on every IPO...)
Sorry, but this just looks wrong!
This is only true if the market for the BMBE is infinite (ie. new IPO's needs to be done all the time)
I very much doubt thats the case.
It will 'level out' at some time.
Originally by: Shimpu
With a model like 40/20/40 or 50/20/30, there would be huge demand for shares on the free market and for new IPOs aswell. Especially with the 50/20/30 model, the shareholer would actually get more and more profit from his shares, regardless of new IPOs.
I'm sorry, but the proposed and now up for vote 40/40/20 or any of the above suggested ones - only really makes an impact on the BMBE capital in the *very* long run.
It's effect on when a new IPO is needed is perhaps at best 5-10% (time wise) if that much...
Originally by: Shimpu
1. Less IPOs - raise interest rates instead for as long as possible
2. Less management fee (20%)
3. Less shareholder dividend (40%)
4. Introduce BMBE capital buildup from the monthly revenue of BMBE (40%)
5. *win eve*
1. Sorry, but no. Why and when IPO's are trickered will not change.
I want the BMBE to grow. Preferbly to the 500B+ range, as that then means that we can have a large stash (in the 10% range) of ISK "at the ready" for any huge loan taker, without the effect of the not lend out ISK beeing felt very much.
With the current capital this simply aint possible, except just after a new IPO....
2. As we climb towards the 500B+ range I'm not adverse to lowering the management fee even more - But currently the 20% reduction (up for vote atm) is it.
3. Works for me
4. Works for me as well - Currently just not at the rate you suggest.
5. 
BIG Lottery
[u |
Rthor
|
Posted - 2006.06.11 04:21:00 -
[24]
There are different way of doing business. You can make money by meeting a demand and I think that it is all right regardless of how much money you make.
But I think that there is another way of doing business where you create some complicated scheme thinking that you created something special and confuse everything and everybody including yourself, whether intentionally or not. In the end it all leads to other people basically losing their money while you end up with at least some, if not all of it, indirectly.
I do not think that this latter way of doing business is exactly legitimate. Some people may disagree and think that this is just some brilliant idea and so whoever thought of it earned the money. I fear that BMBE is this kind of a scheme that is going to end up breaking its investors while you will make money and lose your reputation. Hence the real business here, bypassing all the other stuff that is conspicuous, is selling your good reputation for ISK.
I hope that it does not happen because you seem to be trying to make it work but then again you dont really come across as being overly concerned about your investors' potential losses while defending your right to exorbitant salary, regardless of your investors' returns on their investment, so I dont know what to think of you any more. Good luck to you all.
|
TornSoul
|
Posted - 2006.06.11 05:02:00 -
[25]
Originally by: Rthor
thinking that you created something special
I've never claimed to have created anything special - quite the contrary.
The idea of a bank in EVE goes back years and years, and has been had by numerous people over time.
So nothing special there at all.
Originally by: Rthor
you dont really come across as being overly concerned about your investors' potential losses while defending your right to exorbitant salary, regardless of your investors' returns on their investment
Originally by: TornSoul
I'm not adverse to lowering the management fee even more - But currently the 20% reduction (up for vote atm) is it.
BIG Lottery
[u |
Baun
|
Posted - 2006.06.11 10:18:00 -
[26]
Quote:
Uhm... No offense, but the last IPO did just that in fact (increase the value of the shares), as they where sold at a higher value than before.
So perhaps you should in fact instead *wish* for more IPO's (as those will do excactly the same)
Thats very disingenuous. The IPO "increased" share value only nominally by 4%. Can anyone currently resell their shares at 52m? No. Did the IPO then actually increaase the value of the shares? No.
Quote:
Err... Yes...
Why on earth wouldnt we if the market is there???
Simple. IT HURTS THE SHAREHOLDERS TO DO SO.
If you take more of the profit and reinvest then the value of shares currently held increases. If you continue to issue new shares, especially when you cannot sell them all, the value of the shares at best stays the same and more likely decreases.
This IPO you decided to up the price to 52m. Unfortunately you couldn't sell all the shares and BIG had to buy about the last 100 or something. This means that the shares are actually worth less than 52m since no one can resell them at 52m and it means that the shares owned by thsoe who bought at 52m have actually depreciated in value.
Quote:
Well - Why dont you then?
Thats the catch aint it
I'd love making billions each month producing Hulk's as well - But why dont I?
My point beeing - Complaining about how much ISK other people make is... well... Kindergarden envy...
How can you possibly compare shareholders commenting on the distribution of profits to a random person talking about how much money a Hulk BPO owner makes? Either you are significantly less intelligent than people think you are TS or you are not making that comparison in good faith.
If 50% of the profit is justified for the very simplified business model you went to when you accepted t2 BPOs as security then how much was justified when you thought you were going to have to go around to stations everywhere in EVE and pick things up? If 50% of the profit is justified for managing a few BPOs and dealing with customers then surely 90% must have been justified for giving out other peoples' money and doing alot of ***** hauling.
The truth of the matter, despite your obtuse comparisons is that the point raised is completely valid. 50% profit to management was based on a business model that required you to do alot more work NOT one where you do far less.
Quote:
Really? Why is that excactly?
When all ISK from a new IPO is lend out - Old (before the new IPO) shareholders will get *excactly* the same amount of ISK paid out.
Ie. the impact will be *zero* to old shareholders.
And the more IPO's that gets done, the less will the 'transition phase' (time until the newly raised capital gets lend out) impact dividend payout.
This (and more) has been described in detail already - Complaining about it after having bought shares is a bit silly imo...
Why is it not acceptable?
Because it does NOTHING to help the current shareholders. These are the people you should be working for, these are the people that showed faith and gave you their money and waited 3-4 months to get anything back.
Issuing new IPOs instead of reinvesting alot of capital means that the investment of those who showed faith and trust is not increased over time.
Herein lies the problem with the fixed and equal management shareholder profit distribution. Everytime you issue new shares and get new capital to lend out management gets more money and at best shareholders get the same money and the value of their shares stay the same. At worst, they get less money if fewer loans are taken out and their shares decrease in value.
See the problem here?
Quote:
Wrong - As already explained above, new IPO's in fact 'artificially' increase the value of shares.
So you are comfortable with a 1% (non-continuously adding) increase in value per month?
The Enemy's Gate is Down
|
Baun
|
Posted - 2006.06.11 10:40:00 -
[27]
Edited by: Baun on 11/06/2006 10:41:10
Quote:
The 'harm' to shareholders is short term - and has very detailed with examples and all been put on the table from the get-go as something that would invariably occur every now and again.
And the conditions for it happening likewise.
We had this whole debacle at the begining of the 2nd IPO as well.
Current shareholders dont like new IPO's as it shortterm (until all new ISK has been loaned out again) hurts the size of their dividend.
And if current shareholders had their say, its very unlikely that any new IPO's would ever happen.
Which (among other things)is why the shares are non-voting shares...
The harm is mroe than shortterm. At best the harm to shareholders is short term and their dividend rebounds to the same level. At worst, the increase capital drives down interest rates and the increase number of shares decreases demand in the resale market.
So in the best case the share holder is not affected by new IPOs and in the worst case he is completely screwed. This means that in the average case he is moderately harmed. Meanwhile, management is never harmed by new IPOs unless the amount of loanable funds really messes up the money market.
What shareholders want is for you to run the business intelligently. Instead of responding to demand greater than your supply by continuously issuing more shares HELP YOUR SHAREHOLDERS. Increase interest rates until the demand balances with your supply. You can even do this without having to decrease your management fee below the level of shareholder dividend.
You don't need to be so defensive and reacting that way when people are raising coherent points makes you look uninterested in those who are facilitating your business.
As it stands your only substantive counter arguments to the points raised have been the following:
1. New IPOs increase the share price by increasing the price at which shares are offered.
2. If you didn't like the business model don't invest.
Re: 1. New IPOs only increase the share price if you can sell all of the shares at the increased price AND if there is a market for shares.
You cannot sell all the shares and there is no market for the shares. This signals that there probably won't be more investors if you tried to do another offering anyway, and also that people are not satisfied with the returns.
Re: 2. This is not really an argument at all. People are pointing out real ways to improve the business model so that more money is made and the market is not destabilized. Response #2 is akin to saying "if you didn't want to have your money mismanaged why did you give it to me" and does nothing to address the substantive improvements suggested.
If you believe that your business model (Issuing New IPOs to meet demand instead of raising interest rates, driving down the interest rates by raising the money supply) is better than the proposed changes (raising interest rates to increase profits for management and shareholders instead of issuing new IPOs to make more money only for management, possibly decreasing management fee further to increase reinvestment) then you need to ARGUE for that position instead of deflecting criticism that will only help you.
The Enemy's Gate is Down
|
Baun
|
Posted - 2006.06.11 10:40:00 -
[28]
Edited by: Baun on 11/06/2006 10:41:32
forums took a dump, ignore this.
The Enemy's Gate is Down
|
Baun
|
Posted - 2006.06.11 10:46:00 -
[29]
Originally by: Rthor
I do not think that this latter way of doing business is exactly legitimate. Some people may disagree and think that this is just some brilliant idea and so whoever thought of it earned the money. I fear that BMBE is this kind of a scheme that is going to end up breaking its investors while you will make money and lose your reputation. Hence the real business here, bypassing all the other stuff that is conspicuous, is selling your good reputation for ISK.
Tornsoul is not out to screw anyone. He doesn't do that and he never will.
Rather, he is just being incredibly stubborn in the face of obvious criticism and does not want to appear weak by acceding to suggestions right away. Since he is smart, he will eventually do it anyway (because we are right and he is not), but in the meantime we won't make as much money as we should.
The Enemy's Gate is Down
|
Ray McCormack
|
Posted - 2006.06.11 17:05:00 -
[30]
Originally by: Baun
If 50% of the profit is justified for managing a few BPOs and dealing with customers then surely 90% must have been justified for giving out other peoples' money and doing alot of ***** hauling.
The idea was never to do that much hauling, if any.
| The BIG Lottery | BIG Sales | 285459 | |
|
| Pages: [1] 2 :: one page |
| First page | Previous page | Next page | Last page |