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Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.30 16:26:00 -
[1]
To start, this is not the full status update that I promised to provide next week, rather it is a clarification of my intentions and a general overview of where we stand. A more detailed report will still be released next week.
I have noted a few places were people seemed to believe that I am completely leaving the datacore harvesting industry, or that DATAC will be shut down completely. This is not the case. DATAC will continue to opperate through the end of June 2009.
With the declining market, I am no longer confident that the original target return of 8% per month can be reached. The current value of Mechanical Engineering datacores is 20% lower than the originally stated price point required to meet that target.
While there are some datacore fields that currently remain above the target price point, I fully expect that, at the longest, within a couple of months, they too will drop like wise.
Had everything been proceeding as desired, I would still be focused on ramping up production capacity.
However, due to the declining market, I believe it to be prudent to change the focus from maximizing-growth to cutting-loses.
As such, I am currently planning to put the characters into a rotation of extended hibernation, allowing them to store up datacores, without the cost of GTC's and ensuring some profit beyond covering operational expenses.
This will delay the growth of capacity, but will ensure that investors get some return even in the case of a continued decline in the market. The further the market receeds, the more prudent this course of action becomes. If the market bounces back, we could then take that oppurtunity to resume growth of capacity.
While the growth of DATAC will be limited, having the characters in hibernation will free up time that I can then spend looking for more profitable endevors. As an example, there is the potential partnership with Ricdic (and/or others) in the area of lab operation.
I will also be able to expand my private endevors which have suffered because of the time commitment demanded by DATAC. If I my private endevors are successful, I would use those profits to subsidize DATAC. However, I have been so focused on DATAC, that I do not yet know what those endevors will be, nor do I know how successful I will be at them. As such I can make no promise beyond doing my best.
The reason for the delay in providing a detailed report is so that I can finalize the current harvest and capacity, and thereby report actual numbers instead of projected numbers. Most of the characters are still active. They will be expiring on Feb 2. After they have expired I will need some time to sell that harvest, thus I set the date for the report a week after that.
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Block Ukx
KDM Corp Firmus Ixion
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Posted - 2008.01.30 16:52:00 -
[2]
ItÆs a bad practice to ôsubsidizeö a business using your own profits. If a business is not profitable enough then find an alternative method within the business plan to improve profits. Your proposal of putting ôthe characters into a rotation of extended hibernation, allowing them to store up datacores, without the cost of GTC's and ensuring some profit beyond covering operational expensesö is a very good one.
I donÆt think shareholders are going to be upset if the business is not performing as well as it was proposed.
BSAC Mineral Market Manipulation (MinMa) Information Desk |
Shadarle
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Posted - 2008.01.30 16:56:00 -
[3]
Originally by: Block Ukx I donÆt think shareholders are going to be upset if the business is not performing as well as it was proposed.
I think they will be disappointed at the very least, but perhaps not upset. In any case they don't have much right to be too mad as they chose to invest in a fairly risky IPO.
Tanking Setups Compared
Stacking Penalty / Resists Explained |
Anti Protagonist
Archron Dusyfe Industries
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Posted - 2008.01.30 17:25:00 -
[4]
Edited by: Anti Protagonist on 30/01/2008 17:25:26
Originally by: Shadarle
Originally by: Block Ukx I donÆt think shareholders are going to be upset if the business is not performing as well as it was proposed.
I think they will be disappointed at the very least, but perhaps not upset. In any case they don't have much right to be too mad as they chose to invest in a fairly risky IPO.
To summarise: Performance is disappointing, loss of investment is more upset.
Would I be disappointed to not make my 8%? Sure. Investing in any kind of market is risky though.
The only time I would approach upset is if I lost my investment all together. Even then, I knew it was a high risk investment, so such is risk....
One thing I have noticed though that may help is that GTC prices are actually coming down from their recent peak.
I, personally, think that the plan of staggered activation makes perfect sense and actually though that is what would happen to begin with. If you sell 1000 data cores it doesn't really matter if you sold 1000 that one account was saving up for 3 months or 1000 that 3 accounts were saving up for a month. Sure it takes some extra time to spin-up via that method, but it saves costs which seems to make sense. Of course, I don't know all the inner workings, so that may just be my imagination.
Thanks for the update.
I need a sig.... |
Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.30 18:01:00 -
[5]
Originally by: Block Ukx ItÆs a bad practice to ôsubsidizeö a business using your own profits. If a business is not profitable enough then find an alternative method within the business plan to improve profits.
I agree that limits should be placed on how far a failing business should be subsidized. However, I feel duty bound to go above and beyond just carrying through the just the basics of the original plan.
So I will do my best to recover investors initial investment as quickly as practical. If I happen upon a personal windfall of fortune, I would pass that along to investors. If not, I will do what I can using the original plan, or other activities that build upon it. Originally by: Anti Protagonist I, personally, think that the plan of staggered activation makes perfect sense and actually though that is what would happen to begin with.
Staggered activation has always been a part of the plan. It is just a matter how much they are staggered.
The original plan was optimized for growth through June 2008, and profit for the year after that. The revised plan places more weight on making sure that a profit is made during the early months, instead of only trying to stimulate growth as the expense of those profits.
Should the market continue to drop, the focus would shift further from growth, possibly as far as leaving the characters inactive until the end of the venture.
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cosmoray
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Posted - 2008.01.30 18:29:00 -
[6]
A few questions/comments:
1. In the original IPO there is an opportunity after 24 weeks to cash out. I assume there is no chance of selling shares back to Datac at this point.
2. With accounts in hibernation no skill training is occuring, so no extra value is gained when the character could be sold later. 3. Might be better to put all accounts into hibernation and "IF" the market comes back have a large sale and distribute what proceeds you can.
4. June 2009 is a long time to hibernate / hold accounts on the hope market return without there being a good chance of a potential nerf / game changes.
5. One way to get some money back would be through character sales, but as that would cost money is an unrealistic option.
I think it unlikely that any of the share capital will be returned. Only chance is that ad-hoc dividends returns some money. Good example of a very risky IPO.
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Shadarle
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Posted - 2008.01.30 18:34:00 -
[7]
Originally by: cosmoray A few questions/comments:
1. In the original IPO there is an opportunity after 24 weeks to cash out. I assume there is no chance of selling shares back to Datac at this point.
2. With accounts in hibernation no skill training is occuring, so no extra value is gained when the character could be sold later. 3. Might be better to put all accounts into hibernation and "IF" the market comes back have a large sale and distribute what proceeds you can.
4. June 2009 is a long time to hibernate / hold accounts on the hope market return without there being a good chance of a potential nerf / game changes.
5. One way to get some money back would be through character sales, but as that would cost money is an unrealistic option.
I think it unlikely that any of the share capital will be returned. Only chance is that ad-hoc dividends returns some money. Good example of a very risky IPO.
Seems like a decent summary. I'd definitely suggest very long term duration hibernations. A minimum of 3 months if not 5-6 months. Each month having a different cycle of characters used. It all depends just how many other people are doing this DC thing. If a lot of other people are then prices will continue to drop and hibernation may even hurt profits. If this IPO is actually the main reason prices are dropping (not sure how much DC production has ramped yet) then halting DC sales for a while may actually increase DC prices thus vastly increasing profits if you hibernate.
I think the only person who can make an informed guess on this is Mat. He knows how much competition he has selling the DC's... so he should know if he is hurting prices much or at all.
Tanking Setups Compared
Stacking Penalty / Resists Explained |
Seeing EyeDog
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Posted - 2008.01.30 18:35:00 -
[8]
Originally by: Matalino
With the declining market, I am no longer confident that the original target return of 8% per month can be reached.
might i ask a simple question here. Why wasnt a "declining market" accounted for in your initial proposal? Surely any person/entity attempting to make money off a "FOTM" business would anticipate that the market would decline at a rapid pace, why didnt you? _____________________
Originally by: Locus Bey Intelligence isn't a prequisite for being a Goon, in fact its a deficit.
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Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.30 18:52:00 -
[9]
Originally by: Seeing EyeDog might i ask a simple question here. Why wasnt a "declining market" accounted for in your initial proposal? Surely any person/entity attempting to make money off a "FOTM" business would anticipate that the market would decline at a rapid pace, why didnt you?
It was accounted for.
The market price was over 3x what it is now when I formed my plan. I initally planned for a price drop from 1.8-2.2 million per DC to 600K, and advised investors of that before they invested. I believe that I could recovere the full return at 500K, 20% lower than my original plan. However, it looks like it will drop even further.
I did plan for it, but there are limits as to how much can be done.
I doubt that there are any business plans that could provide their original returns in light of such a brutal slashing of revenues.
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Minerva Vulcan
Caldari The Nexus Foundation Endless Horizon
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Posted - 2008.01.30 19:15:00 -
[10]
The datacore market likely won't see any prices rise anytime soon.
There's still a ton of people jumping on the ass end of the bandwagon, and in a couple months when they get the skills up they'll further saturate the market. _______________________________ I need new voices in my head, To speak my secret evils with. I need new lovers in my bed, To be my friends and special pets. |
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Sikozu Prioris
Suns Of Korhal deadspace society
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Posted - 2008.01.30 19:27:00 -
[11]
Are the shares still going to be at the 160,103.22 value come 22nd of March, or will your status update revise this value figure? ie is the status update is warning about possible dividends and will that effect pre dividend share value which was calculated at the 8% level?
Lol |
Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.30 20:45:00 -
[12]
Originally by: Sikozu Prioris Are the shares still going to be at the 160,103.22 value come 22nd of March, or will your status update revise this value figure? ie is the status update is warning about possible dividends and will that effect pre dividend share value which was calculated at the 8% level?
That is the price I was planning to reference for detirmining when investors have received their initial investment back and the return/loss on their investment.
What real value these shares have is detirmined by their projected dividends.
When I release the more detailed report next week, I will be able to provide a greater insight into what can be expected in that regard.
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Astorothe
Aperture Science Industries
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Posted - 2008.01.31 00:39:00 -
[13]
Thanks for the update Mat.
Ze logs show NOTHING! ~ Eve Corp and Fansite Web design, development and hosting services
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Lo Lightshard
LEG1ON Coalition Of Empires
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Posted - 2008.01.31 01:16:00 -
[14]
Originally by: Shadarle
It all depends just how many other people are doing this DC thing.
What is the goal of the thousands of two week old, NPC corp dwellers (with names that comprise of two random words) that do nothing but hauling missions? Also, why did the highest price datacore crash first and so far?
And they're all training Nanite Engineering to V right now so go short on those datacores
[IMA6E REMOVED] |
Motivated Prophet
Zerodot Schools Power Corrupts Industry's
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Posted - 2008.01.31 03:25:00 -
[15]
I continue to take issue with the fact that this IPO should have generated earlier, higher returns, but the reason it did not continues to be concealed from public view due to an inaccurate understanding of the rules against public disclosure of GM communications.
You may not wish to address that concern, but it is foremost to me nevertheless.
MP --
Proud steward of 47 billion isk in public money, and counting. Ask me about mineral compressionexpansion! WTF? |
Astorothe
Aperture Science Industries
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Posted - 2008.01.31 03:51:00 -
[16]
Although this will still endup being profitable, the actual profits are likely to be a LOT less than initially speculated. Mat has already admitted this, so it's not an argument, but a fact.
As an Investor, my interest in this as an IPO faded once I realised my higher risk project is going to deliver profits that are not much better than some very low risk projects.
My second last point is that as an investor, I always invest in the PERSON and not the Project. I think Mat has handled the drama excellently, and I would re-invest in him again.
My very last point is for Mat, that perhaps it's time to call particular project a day, cut our losses, and look at re-investing into something else. Unless you think we can still make some decent profits?
Ze logs show NOTHING! ~ Eve Corp and Fansite Web design, development and hosting services
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Shadarle
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Posted - 2008.01.31 05:38:00 -
[17]
Originally by: Astorothe My very last point is for Mat, that perhaps it's time to call particular project a day, cut our losses, and look at re-investing into something else. Unless you think we can still make some decent profits?
Re-invest what? As far as I know all the money invested has been used for funding the characters. If he was going to have a new round of shares issued that means the money is all needed to keep funding these characters. If there was enough money earned from DC's to fund the characters then there would have been no reason to issue more shares.
That's just my logical thinking on the matter.
There is no way to cut losses. All money is lost, it's now in the form of characters generating DC's. So it would seem the only thing to do now is to sell the DC's and make as much out of this as possible.
Tanking Setups Compared
Stacking Penalty / Resists Explained |
Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.31 05:51:00 -
[18]
Originally by: Motivated Prophet I continue to take issue with the fact that this IPO should have generated earlier, higher returns, but the reason it did not continues to be concealed from public view due to an inaccurate understanding of the rules against public disclosure of GM communications.
I can address this a little further.
That issue had a number of side effects.
Most notably it decreased the harvest that would have been possible in December. It also lessened the the harvest that would have been possible in January by a lesser degree. Had the issue not be resolved, it would have also pushed back key training targets which would have compounded future lost profits, this long term effect would have been far more concerning than the effect on December and January's revenues.
On the other hand, because of the bug, I did not immeadiately commit Decembers profits back into the operation. Further the resolution agreed to with the GM's set the characters back on their training targets, and reduced January's operating expenses to almost nothing.
I estimate that in light of the adjustments to the original plan, the restitution made by CCP out weighs the lost profits. Had those profits been earned as originally planned, they would have immeadiately been recommitted to the opperation of the project. However, with the way things have actually unfolded, I will have ISK available to be paid out to investors prior to the hibernation of the characters that would otherwise be locked away for several months. I will not know the exact amount until next week, but I expect to payout most of the profits earned so far as a dividend, keeping only a minimal amount of working capital.
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Matalino
Gallente Ki Tech Industries
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Posted - 2008.01.31 05:56:00 -
[19]
Originally by: Astorothe My very last point is for Mat, that perhaps it's time to call particular project a day, cut our losses, and look at re-investing into something else. Unless you think we can still make some decent profits?
Originally by: Shadarle There is no way to cut losses. All money is lost, it's now in the form of characters generating DC's. So it would seem the only thing to do now is to sell the DC's and make as much out of this as possible.
The only way to cut our loses it is to change the focus of the operation. Instead of trying to maximize growth, and count on long term prices to make a profit, the plan now is to put the characters into hybernation, sacrificing long term growth, in the hopes that prices will stay up high enough, long enough to get some modest return.
As for what the numbers are for that return, I will be able to provide details next week once the characters have entered hybernation.
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Kuseka Adama
Gallente Paxton Industries Paxton Federation
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Posted - 2008.01.31 06:51:00 -
[20]
Information is vital (thanks btw) Based on what was said in an earlier thread i was in fear of losing my entire investment. While i knew there were risks and that a total loss was possible i had originally put the probability of a total loss; despite a declining market at about 5%. In the belief that Matalino based on research i had done would of stopped things before they had gotten that far. There is a big difference between a lost investment and a diminished return. I apologize for my rather hysterical post in that other thread Matalino but without information i was quite worried. This at least explains some things for me.
I am not someone who creates i am someone who typically blows things up at the moment those things are computer generated. In the near future that will include things player generated. Because of this i don't have the experience in stuff of this nature that others might. Thanks for spelling out the situation to at least some degree.
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