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Fumitsugu Sylwia
Guristech
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Posted - 2010.07.27 11:07:00 -
[31]
I'm interested, but I shall be going on holiday for the first half of August and I don't want to start before then  . Is "recruitment" going to remain open indefinitely or are you going to be accepting new applicants on a periodic basis?
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Cista2
Hydra Investment Fund
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Posted - 2010.07.27 11:12:00 -
[32]
 Originally by: Fumitsugu Sylwia
I'm interested, but I shall be going on holiday for the first half of August and I don't want to start before then . Is "recruitment" going to remain open indefinitely or are you going to be accepting new applicants on a periodic basis?
At the moment the concept looks succesful and we are really in need of more young corps to join in the coming weeks.
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"Signatures" chatroom for traders / Hydra Investment Fund |
Vasaczk
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Posted - 2010.07.29 22:54:00 -
[33]
One thing I can see tripping this up is secondary or later releases of shares.
Are the initial investors aware that if additional shares are released (from being freshly created) that there is value dilution?
I know you want price discovery, but if there is a little ignorance on either side (corp or investor) then there is potential for drama llama which often leads to a break down in relationships and thus inviting non-intentional scams.
I myself will be making an offer in the next few days (one man corp will very low value, I just want to be involved), and was wondering if it would be better to start with a large pool of shares (10000+) and avoid diluting value at later stages or go with value dilution.
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Cista2
Hydra Investment Fund
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Posted - 2010.07.30 06:30:00 -
[34]
Edited by: Cista2 on 30/07/2010 06:35:01
Originally by: Vasaczk
Are the initial investors aware that if additional shares are released (from being freshly created) that there is value dilution?
Hey, looking forward to your launch!
But you are looking at the subject of share value crosseyed. Remember that all the shares are identical, the only difference is the original share value. It is the task of the share issuer to maintain the good relation to the investors, while also getting a nice income from the share sales.
Let's say as an example that you release shares at a value of 50,000 isk, but next time you want to sell them at 200,000 isk. Then the only way that people will actually buy the expensive shares is if the dividends are expected to be good. You may have to hike the dividends up at this point. (What we see so far is that several share issuers are projecting flexible dividends, as a percentage of the profit of the project profitability.)
So what about the original investors? Those shares they bought for 50,000 isk are now worth 200,000 isk or more, so they should be very happy pandas.
Originally by: Vasaczk
there is potential for drama llama
That is true. But the idea is that both investee and investors will maybe learn from crises, and with smaller amounts of isk involved than in normal ipos.
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"Signatures" chatroom for traders / Hydra Investment Fund |
Shinshi Casoyako
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Posted - 2010.08.05 15:04:00 -
[35]
Eventhough this all looks tricky it is still only small pocket money that is invested. Because of this losing the money is not a problem. Unlike the "I want to loan 2 Bil" request.
Cista2 is very friendly in conversations and very helpfull. As it seems the corperations involved are possible very good corperations.
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Seriously Have I Not Said How I Can Assist Some One You Are Killing Online? |
Sepi
Gamma Draconis Industries
Eternus Imperium Alliance
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Posted - 2010.08.05 15:50:00 -
[36]
Edited by: Sepi on 05/08/2010 15:50:36
I myself joined Cista2 market and have been thinking about releasing more shares as i am seeing people placing buy orders for stock however the hardest part for me as the CEO is determining the value of the shares.
I have come up with 2 scenarios.
Scenario 1, My shares value is what people are willing to pay, So currently at time of this post the highest buy order up for my stock is valued at 3x my release. This to me seems the logical point to start, So should i release more stock onto the market with my current payout structure then its already clear that this highest buyorder is currently the maximum people are willing to pay. So the next bactch will be available at this price to start.
Scenario 2, If this is what people are trying to buy my shares for (3x release value) then i could argue that they are worth a bit more, So 4/5x start value. Obviously should i wish to release at this price I could run the risk of not having my new stock bought up and over-valuing my own corporation. And doing this would it then be expected for a higher % return or just the fact i value stock 5x more then payout is 5x more isk?
These are the 2 problems that i can forsee in a future release from my stock.
GDRI Stock for more information on my current and future projects.
It would also be intersting to see what other corporation CEO's are considering for future releases.
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Cista2
Hydra Investment Fund
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Posted - 2010.08.05 16:11:00 -
[37]
Originally by: Sepi
Edited by: Sepi on 05/08/2010 15:50:36
I myself joined Cista2 market and have been thinking about releasing more shares as i am seeing people placing buy orders for stock however the hardest part for me as the CEO is determining the value of the shares.
My advice is to plan your project before planning the value of the shares. Like this:
- What size are you aiming for your business to have 2-3 months from now? 500 mil, 1 bn, 3 bn?
- What size of dividends will you pay at that time?
- Divided onto how many shares?
- And then try to estimate what you would say the shares should be valued at that time. Your next release should be a step towards that.
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"Signatures" chatroom / Hydra Fund / LLSE Stock Market |
Lucyna
Minmatar
Interstellar Killer Bee Enterprises
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Posted - 2010.08.06 00:01:00 -
[38]
I think that since I'm a growth-oriented corporation, and the main value of the stock comes from the NAV of the corporation (I'm only giving 5-10% of profits in dividends), I realize that any extra share issuance will only dilute the fund or cost me some, because I hold only 50.1% of the shares currently.
An extra issuace would mean that I'd have to
(a) give myself more shares (bad), or
(b) put in the money of what the shares are worth and thus buy the shares in essence (expensive).
So I think that in the future, if I need more operating capital, I'll take out a loan. That's how I'd suggest other corps do it, but to each CEO his own. Without putting in the same amount of cash that you get from a second issuance, you are sort of messing with your investors future returns.
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Lucyna
Minmatar
Interstellar Killer Bee Enterprises
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Posted - 2010.08.06 00:07:00 -
[39]
Edited by: Lucyna on 06/08/2010 00:07:49
Sorry double post.
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Shinshi Casoyako
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Posted - 2010.08.06 07:54:00 -
[40]
The most important thing for the stockholders is dividend. The more dividend per share you give out the more worth they become.
So for example. You have 2001 shares and sold 1000. This means that ~50% of the dividend you pay out is going to investors. So to have the stocks return its value you need to send dividend of 2001 * starting price.
I believe this is for you 50000 * 2001 = about 100 million (of which 50 million comes back to you again)
How to capitalize on this for future investments:
Raise your ammount of stocks to 4002 (doubeling it). Sell 1000 at a price of for example 200000 isk per share. this will bring you 200 mil. Use 100 mil as dividend towards all shares. This means 25000 per share roughly. So the initial shares have had a 50% return on there original bought value of the shares, the new share holders had a 12,5% direct return on there investments and you can use the 100 million for your company.
Offcourse you now have to make more money for dividend to get the shares increase further. But in essence this is what makes people invest more in your company.
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Seriously Have I Not Said How I Can Assist Some One You Are Killing Online? |
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Skarii TuThess
Lansez Innovations
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Posted - 2010.08.06 11:59:00 -
[41]
Edited by: Skarii TuThess on 06/08/2010 11:59:09
Shares have 2 values, a notional value and a market value. As a CEO of a public corporation you only really need to worry about the notional value.
Notional
The notional value is the 'real' worth of a share. If your corporation is worth 1bn ISK (worth in terms of your NAV, ie your cash and value of all assets), and you have 1,000 shares, then the notional value of each share is 1bn / 1000 = 1m ISK per share.
Market
Of course a share is worth more than just the notional value, as it will also return a dividend. This means that shares are often sold for a greater amount than their notional value. Market value is of course entirely dependent upon what people will pay for them, but you can apply some science to this.
Let's take our shares above as being worth 1m each, and say you expected the dividend to be 10% (100k). If you paid 1,100,000 per share then you would retain the notional value of 1m, and the extra 100k you have paid would be covered in the first dividend, and earn profit thereafter.
Or you could work it in reverse and say that you expect the dividend to be 100k, and you are happy with a ROI of 8% instead of 10%. The 100k dividend / 0.08 = 1,250,000 (1.25m per share).
Of course this depends upon the notional value remaining the same. If the corporation is growing your share price will be increasing (although possibly at the detriment to the dividend amount), so that will have to be factored in as well. If you expect the share notional value to increase from 1m to 1.6m over the year, then you are 'earning' an additional 50k per month that should also be factored in.
Share Release
If you want to avoid any drama, then as a CEO you should release new shares at the notionall value. If your notional share price is 100k and you want to raise an additional 100m ISK then release 1,000 more shares at 100k each.
If you are prepared to face some probing at the chance of making more money then you can try and sell the shares at a market value. You can declare what you are going to do with the additional ISK you generate (pump it into the corp, pay as a bonus to staff, pay as a dividend to investors) etc.
For example you might not feel that you can sell your shares at 100k each, but I might think that I can. So you can give your shares to me with me acting as a broker on your behalf. I might then be able to sell the shares at 110k each, with the additional 10k pocketed by me for the service of selling them.
There's not really a right or wrong way of doing this as long as you're honest about what you are doing. Ultimately if people are happy they will buy it and if they are not then they won't. Of course it may not make you very popular!
However...
That said this is best practice, and it is up to you to maintain it. The challenge with these micro offerings is that for the sake of 100m here and there a lot of people are just buying it without reading the text of the plan properly because they don't really care about losing it all. This means that you could get away with some pretty shocking offerings (trying to sell shares with a notional value of 50k @ 200k for example). The challenge of this scheme is to try and establish some integrity by not just accepting any offer that comes along but ensuring that good principles are upheld.
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Lucyna
Minmatar
Interstellar Killer Bee Enterprises
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Posted - 2010.08.07 20:08:00 -
[42]
Cista2, I'd suggest you don't post about this topic in Jita local... I think it'd lower the quality of corps using this service to IPO. Of course it's your call, and getting the word out is important, but the type of people you'd get from Jita local... IDK your call.
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Sepi
Gamma Draconis Industries
Eternus Imperium Alliance
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Posted - 2010.08.09 16:04:00 -
[43]
Originally by: Skarii TuThess
Edited by: Skarii TuThess on 06/08/2010 11:59:09
Shares have 2 values, a notional value and a market value. As a CEO of a public corporation you only really need to worry about the notional value.
Notional
The notional value is the 'real' worth of a share. If your corporation is worth 1bn ISK (worth in terms of your NAV, ie your cash and value of all assets), and you have 1,000 shares, then the notional value of each share is 1bn / 1000 = 1m ISK per share.
Thanks for this (and other responses) the only concern is my NAV(using above formulae) is far higher, Without doing the exact maths should i choose to close up shop and sell all the corporations assetts (which im not) as of today i have about 8>10billion in corp assets... plus another 3bill or so in build jobs on going at anyone time. So with that basic idea i have on face of it short changed the value of my corporation.
For me though this share offering isn't for cash injections but hopefully will provide people a small insight into my ability to run a succesful business with other people as investors. For some point in the future i will consider arranging a larger amount either via loan (secured/unsecured)/bond or another mean. My goal has always been to purcahse to a 'profitable' T2 BPO then use that for manufacturing (this is still a long way off probably some point post x-mas)
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Cista2
Hydra Investment Fund
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Posted - 2010.08.18 07:11:00 -
[44]
Still looking for new entrepeneurs that wish to sell themselves on shares. We have had 6 share releases so far, all have sold out and all ipos have buy orders waiting for people willing to sell.
The market is definitely ready for more small corps to join, so don't hold yourself back.
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"Signatures" chatroom / Hydra Fund / LLSE Stock Market |
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