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Ricdics
Corporate Placement Holding Zzz
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Posted - 2007.12.29 06:52:00 -
[1]
Hey guys,
I was just going to go ahead with this but thought I would make sure I am doing it right beforehand. Basically with TCCS it may not be around too much longer (might be 2 months, might be 2 years). TCCS has been having a good run the last few months but when the good run finishes I would like to shut down TCCS.
Now some of TCCS assets are dead weight. They aren't really generating any income. I can replace them with income generating assets but then those assets will need to be sold when the good run finishes in a few months.
I have sold 4b worth of TCCS assets (BPO's) meaning if I dividend that out, corporate NAV drops by 4b, down to around 18b. Optimal for me would be to dividend it off, and dividend off other assets as they are sold. It does make things a little more messy in closing (would need up to date records and information to state what each dividend is:
ie:
4.2b dividend 2.2b income 2.0b reduction in NAV
and basically to ensure it all calculates properly at the end. Anyway, thats my 'qualm' at the moment. I don't want that 4b to sit idle, I don't really want to buy more of those assets as liquidating will be difficult when the good times finish, and I don't want to close right now.
What do you guys think? As TCCS Investors (or even not) do you see a problem with slowly reducing NAV by dividending it off?
Insured Research and Production Services Queues |
Treelox
Amarr Market Jihadist Revolutionary Party
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Posted - 2007.12.29 06:55:00 -
[2]
you forgot one option.
Share buy back with the idle cash. --
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Ricdics
Corporate Placement Holding Zzz
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Posted - 2007.12.29 07:02:00 -
[3]
Yeh I thought of that in the past few minutes. How do I determine buyback price? See dividends are going strong. What happens if people don't want to sell their shares in the first place? Insured Research and Production Services Queues |
FastLearner
Fury Holdings Brutally Clever Empire
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Posted - 2007.12.29 08:18:00 -
[4]
If you're winding it down with a view to closure then dividending off surplus ISK as you get it seems the best way to do things. If you go that route I'd recommend unlisting TCCS from any stock exchanges it's listed on - as the value of the shares obviously drops when you dividend out more than the generated profits.
Voluntary buy-backs would be the other way to go with surplus ISK - but that adds a lot of extra admin.
The situation is made more complicated as you don't appear to have a fixed date for end of operations - which makes it hard to calculate a fair buy-back price. Voluntary buy-backs at NAV would be the most equitable route - but then you'd most likely have noone interested until you stopped making decent profits, at which stage you'd have a whole flood of requests.
I'd go for announcing a gradual liquidation (over an unspecified period) and dividend out the surplus ISK. Reporting a fairly accurate NAV would then become important - so investors could calculate what their actual returns were based on the remaining share value.
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Treelox
Amarr Market Jihadist Revolutionary Party
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Posted - 2007.12.29 08:25:00 -
[5]
Originally by: FastLearner If you're winding it down with a view to closure then dividending off surplus ISK as you get it seems the best way to do things. If you go that route I'd recommend unlisting TCCS from any stock exchanges it's listed on - as the value of the shares obviously drops when you dividend out more than the generated profits.
Voluntary buy-backs would be the other way to go with surplus ISK - but that adds a lot of extra admin.
The situation is made more complicated as you don't appear to have a fixed date for end of operations - which makes it hard to calculate a fair buy-back price. Voluntary buy-backs at NAV would be the most equitable route - but then you'd most likely have noone interested until you stopped making decent profits, at which stage you'd have a whole flood of requests.
I'd go for announcing a gradual liquidation (over an unspecified period) and dividend out the surplus ISK. Reporting a fairly accurate NAV would then become important - so investors could calculate what their actual returns were based on the remaining share value.
Since Ric doesnt have a plan as to when the closure will actually happen, giving out an extra big divy at this time would only serve to decrease the corp nav.
IMO better at this point to buy back shares with this cash surplus from this partial liquidation of assests at this point, thus the corp retains its current nav. --
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FastLearner
Fury Holdings Brutally Clever Empire
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Posted - 2007.12.29 09:56:00 -
[6]
Originally by: Treelox
Originally by: FastLearner If you're winding it down with a view to closure then dividending off surplus ISK as you get it seems the best way to do things. If you go that route I'd recommend unlisting TCCS from any stock exchanges it's listed on - as the value of the shares obviously drops when you dividend out more than the generated profits.
Voluntary buy-backs would be the other way to go with surplus ISK - but that adds a lot of extra admin.
The situation is made more complicated as you don't appear to have a fixed date for end of operations - which makes it hard to calculate a fair buy-back price. Voluntary buy-backs at NAV would be the most equitable route - but then you'd most likely have noone interested until you stopped making decent profits, at which stage you'd have a whole flood of requests.
I'd go for announcing a gradual liquidation (over an unspecified period) and dividend out the surplus ISK. Reporting a fairly accurate NAV would then become important - so investors could calculate what their actual returns were based on the remaining share value.
Since Ric doesnt have a plan as to when the closure will actually happen, giving out an extra big divy at this time would only serve to decrease the corp nav.
IMO better at this point to buy back shares with this cash surplus from this partial liquidation of assests at this point, thus the corp retains its current nav.
Why does it matter if NAV drops? If people got, say, 10% of their original investment back from surplus ISK then yes - the NAV of their shares has dropped by 10%. But the payout in future months is actually a higher percentage of current NAV/share value (which IS what matters) than if the ISK sat idle in the corporation wallet.
If the investors add the cash they receive back to the NAV value of their shares then they have the same total value as if the payment weren't made. The difference is that part of it is now in their wallet and able to used to generate revenue rather than sitting idle. Even if they just slung the ISK into an EBank interest-bearing account they'd be financially better off than having it idle in TCCS wallet. And they have the option of investing it into other, more lucrative, offers.
Your mistake is looking at JUST the share NAV - you need to factor in the returned ISK to properly assess the financial merits of this route.
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Simon Meyer
Gallente Silent Sun Enterprises
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Posted - 2007.12.29 12:16:00 -
[7]
You can have a share buyback program but because neither the duration nor the value of future dividends is known, I think there will be very little interest in the buyback.
I think it would be better to dividend off idle isk as it becomes available, and post the new NAV after the dividends are issued, maybe a disclaimer can be made at EGSEX and RESX "corp is reducing it's value, inform yourself before buying" or not
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DragonRiderTao
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Posted - 2007.12.29 19:17:00 -
[8]
Some assets are lying dormant. Send their value back to those who share growth. How many dragons can you slay? You cant slay mine. |
Dr Einmoch
Hi-Tech Industries
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Posted - 2007.12.29 20:40:00 -
[9]
Best option is to buy back @ prices you find reasonable (or buy any TCCS on sell order) the boughtback shares make sure that more of the dividends stay in corp (and get dividended next month) thus increases the dividends.
For Technology - For the State - For Profit! Hi-Tech Industries, Caldari R&D Corporation |
Kwint Sommer
Incoherent Inc Otaku Invasion
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Posted - 2007.12.29 21:03:00 -
[10]
Dividending out the unneeded assets is the easiest thing to do and it seems quite fair to your stock holders. The only reason I can think of not to do it is the substantial affects on the share prices but I don't think they're that heavily traded. The alternatives just make a hell of a lot more work for you....
___________________________________________ 5% Mining Implants & 5% Manufacturing Implants *From 110M to 150M |
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