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TornSoul
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Posted - 2006.03.05 22:47:00 -
[1]
This is the first BMBE Shareholder report, and as such will be a bit verbose.
Aproximatly 1 month ago the BMBE IPO launched. 1000 shares valued at 50M ISK each where put on the market, for a total value of 50B ISK.
Within the first 2-3 days roughly half of the shares sold. After that and until the closure of the IPO on sunday 2006.02.26 it was a trickle, that ended up in a total of 931 shares beeing sold. The remaining 69 shares has been bought by BIG.
The 'usual' ways of acquiring/selling shares thus has to be used in the future (market forums, direct approach of shareholders etc)
Profit numbers for the first month of the BMBE
Expenses : EVE-Radio ad : 140M ISK
Income Loan profits : 0 ISK
Total profit : -140M ISK
Profit to be distributed to shareholders : 0 ISK
Yes you read it right - Not a single loan has been taken out.
A few facts about the actual usage of the BMBE so far:
117 persons have created an account. 41 of those has used/tested the interface as far as to putting some items into their 'shopping-basket' 5 has actually tried to hit the "Submit to staff" link (but has not contacted any BMBE staff - I suspect those 5 are simply 'tests' of the interface, and not earnest interest in taking out a loan)
I really dont know what to think...
One obvious reason is ofc that the BMBE is not that well known among the entire EVE populace just yet - That is hopefully something that will change over time.
One other reason I suspect, is that the model of having to put up security for a loan is not attractive enough - Even given the easy to use web interface to register this.
In concordance with this, based on the bit of feedback I've had, other 'items' than just those that can be recycled to minerals, are needed to be allowed to be put up as security. Things like BPO's and T2 items/components (or items recycling to t2 components)
These where not originally intended to be allowed as security.
This will change in the near future however. I actually intended to have this done a couple of weeks back already - But RL played a trick on me (timewise... RL work and me getting sick interfered)
Likewise for getting the BMBE web interface more IGB friendly.
-------
About getting the BMBE more well known (which is the first step to make anything else happen) :
Given the forum rules, it's limited just how much I can do there...
Having people (the shareholders...) add a link to their ingame bio etc. could help a bit... So I'll take this oppertunity to encourage that.
A bit of good news is that I got interviewd by one of the Interstellar Reporters the other day - Meaning, a news piece about the BMBE should hit the frontpage news in not too long. This should up the awareness of the BMBE a bit.
Just how much that, and the planned improvements to the kind of security you can put up for loan, will have on the profits of the BMBE for the next month we will know, well, in a months time.
Lets hope I'll have better news next month.
BIG Lottery
[u |
Dark Shikari
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Posted - 2006.03.05 22:58:00 -
[2]
I think the issue here is that most minerals, T2 items, etc can all be sold easily on market without much effort.
The only things that people will give as collateral are things they can't sell for ISK easily and then rebuy... T2 BPOs and the like.
Another option is to give loans for no collateral but limit them in size based on the character's age and reputation.
[23] Member: Official Forum Warrior
What's with the blue robots? Click my sig.
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Polvek Tybor
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Posted - 2006.03.05 23:17:00 -
[3]
How about corporate bonds. New unknown corps get credit card rates (ie junk bonds) while the blue chips like ISS get to raise capital at better rates.
The reputation risk of default is much stronger for corps.
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Vanlade
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Posted - 2006.03.05 23:45:00 -
[4]
Consider allowing load toward a whole corporation, based on reputation rather then collateral.
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Mahrin Skel
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Posted - 2006.03.06 00:08:00 -
[5]
Well, I'll tell you the thought process I went through when I heard about it:
1) Oh, cool, I could use this, if I could get about 300M loaned against my 600M in inventory, I could ramp up my business a lot faster.
2) Well, hell, they'll only loan based on mineral value. My inventory is all T2 modules, mineral value something close to jack-squat.
3) And they want to hold onto the collateral? The collateral is my stock, if I can't put it up on sell orders, I can't make any money.
The question you forgot to ask is who your customer would be, and how your business structure could help them.
--Dave
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Kerushi
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Posted - 2006.03.06 01:20:00 -
[6]
would have had 800-90000mil profit by now if doing what i told u
not that many visit eve radio (never go there personally), more luck on forum, wich is free ________________ I don't DO graphics, here's a sig anyway, wubwoo - Cortes lol thanks :-) |
Henry Fredyericus
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Posted - 2006.03.06 20:01:00 -
[7]
So far you are doing great. Every new service needs a bit advertising and introduction to the community.
As an EVE bank, you are currently a leader in an uncharted lands, so it's expected to have a rough road.
But anyway...keep up the spirit.
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Baun
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Posted - 2006.03.07 02:03:00 -
[8]
Originally by: Mahrin Skel
3) And they want to hold onto the collateral? The collateral is my stock, if I can't put it up on sell orders, I can't make any money.
Not really sure what people expect.
How else can they secure a loan other than holding collateral? Are they just supposed to trust you when they have no realistic means of holding anyone to a contract in EVE?
The Enemy's Gate is Down
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Alanix
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Posted - 2006.03.07 02:18:00 -
[9]
Quote: And they want to hold onto the collateral? The collateral is my stock, if I can't put it up on sell orders, I can't make any money.
Umm...what good is collateral if it is held by the debtor rather than the creditor? You wouldn't take out a mortgage and ask the bank to just go ahead and give you the deed, because you promise if you default on your loan you'll give it back to them!
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Dark Shikari
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Posted - 2006.03.07 02:25:00 -
[10]
Originally by: Alanix
Quote: And they want to hold onto the collateral? The collateral is my stock, if I can't put it up on sell orders, I can't make any money.
Umm...what good is collateral if it is held by the debtor rather than the creditor? You wouldn't take out a mortgage and ask the bank to just go ahead and give you the deed, because you promise if you default on your loan you'll give it back to them!
Not a good analogy.
Lets say you want to start a business, and you have 100 grand in gold that you can use as collateral. The bank offers you a 50 grand loan if they keep the gold.
Wouldn't you rather just sell the gold in the first place?
Any EVE bank is completely useless if they keep the collateral. If you take out a mortgage to get a house, and the collateral was the house, would it make sense for the bank to keep the house and not allow you to live in it?
[23] Member: Official Forum Warrior
What's with the blue robots? Click my sig.
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Alanix
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Posted - 2006.03.07 02:36:00 -
[11]
Dark Shikari: collateral is not collateral if the creditor doesn't keep it. The exception is RL, where the lender can put a lien on the item, like a car. In a game with no legal system, collateral is utterly useless if the creditor doesn't hold it? Do you really think that if someone defaults on their loan, they will just hand over their "collateral" to BMBE and say "oh well, a deal's a deal...here you go." ???
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Baun
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Posted - 2006.03.07 05:35:00 -
[12]
Originally by: Dark Shikari
Originally by: Alanix
Quote: And they want to hold onto the collateral? The collateral is my stock, if I can't put it up on sell orders, I can't make any money.
Umm...what good is collateral if it is held by the debtor rather than the creditor? You wouldn't take out a mortgage and ask the bank to just go ahead and give you the deed, because you promise if you default on your loan you'll give it back to them!
Not a good analogy.
Lets say you want to start a business, and you have 100 grand in gold that you can use as collateral. The bank offers you a 50 grand loan if they keep the gold.
Wouldn't you rather just sell the gold in the first place?
Any EVE bank is completely useless if they keep the collateral. If you take out a mortgage to get a house, and the collateral was the house, would it make sense for the bank to keep the house and not allow you to live in it?
I don't want to beat this to death (last poster pretty much made the point I wanted to) but it does bear repeating.
In RL a bank has legal tools available to act on defaulted loans. Currently in EVE no such tools exist. There is absolutely no way to guarantee that you don't get cheated unless you hold the collateral.
Maybe contracts will fix this, but I doubt it.
The Enemy's Gate is Down
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Shimpu
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Posted - 2006.03.07 11:04:00 -
[13]
Originally by: Alanix Dark Shikari: collateral is not collateral if the creditor doesn't keep it. The exception is RL, where the lender can put a lien on the item, like a car. In a game with no legal system, collateral is utterly useless if the creditor doesn't hold it? Do you really think that if someone defaults on their loan, they will just hand over their "collateral" to BMBE and say "oh well, a deal's a deal...here you go." ???
Absolutely
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TornSoul
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Posted - 2006.03.07 18:26:00 -
[14]
Edited by: TornSoul on 07/03/2006 18:26:37
If there was a (secure!) way of doing away with the whole colateral thing - Believe you me - I would!
It's nothing but a pain in the ass tbh - Overhead in admin, overhead in coding, turns a lot of otherwise potential customers away etc etc etc.
But sadly, as many past discussions on these forums has shown, there simply is no secure and foolproof way of holding anyone in EVE accountable - and no, the new contracts system wont solve it either.
Due to alts/2nd accounts/use of multiple CC's/GTC's - Theres simply no way of making any ingame character accountable.
And if theres just the slightest 'loophole' in the system, you can be assured *someone* will use it to the max, and fleeze the BMBE (and thus the shareholders).
It's a tough universe we live in
BIG Lottery
[u |
TornSoul
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Posted - 2006.03.07 18:34:00 -
[15]
Originally by: Dark Shikari
Another option is to give loans for no collateral but limit them in size based on the character's age and reputation.
Originally by: Polvek Tybor How about corporate bonds. New unknown corps get credit card rates (ie junk bonds) while the blue chips like ISS get to raise capital at better rates.
The reputation risk of default is much stronger for corps.
A little known fact is, that BIG prior to the BMBE operation, had run a inter-alliance banking system already. And this was based solely on trust - I mean, your alliance mates would be the last ones to screw you ower - Right?
It took nearly a year to finally get the last loan repaid... (~700M ISK outstanding) and it was supposed to have run for only 8 weeks... I cant start describing how frustrating that was... (corp in question is no longer in the alliance, but is still a well respected corp)
So age/reputation based - Sorry, doesnt work...
BIG Lottery
[u |
Adam Weishaupt
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Posted - 2006.03.07 18:36:00 -
[16]
Nobody? Hmm. Last night, I pondered becoming what I guess would have been your first customer because I just didn't want to make the trip to Empire to sell all my things...but I figured, prices are high, buy orders are plentiful, and I can buy something nice while I'm there. So I went and sold instead of doing the loan. And I actually found large buy orders higher than my usual bulk rate - thank you, Domain region.
Why not use the bank? Because my mineral assets are roughly as liquid as money. I can move them rapidly and often without any tax/broker fees through escrow by selling in bulk. Thus, using minerals as your main collateral is not attractive to me, since the only obstacle for me is getting up the pipe to sell them. And once I have a scout who's willing to go die to save my hauler, well...that's cheaper and faster than paying interest.
I believe you're 100% credible, and that you will do everything you can to succeed, but as you said, you've got to add T2 BPOs to the mix. I think you may get large, although infrequent, loans after that. I'll keep an eye on it - rapid access to ISK is good.
Good luck.
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TornSoul
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Posted - 2006.03.07 18:41:00 -
[17]
Edited by: TornSoul on 07/03/2006 18:43:12
Originally by: Adam Weishaupt
<snip> my mineral assets are roughly as liquid as money. I can move them rapidly and often without any tax/broker fees through escrow by selling in bulk.
Which is excactly why we estimate the loan values on the mineral value of what items can be recycled into.
As we can simply recycle the items, and easily sell the minerals, to re-coup a defaulted loan
And hence you are ofc correct - Putting up (just) minerals as collateral, would in most cases be folly.
BIG Lottery
[u |
TornSoul
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Posted - 2006.03.07 18:46:00 -
[18]
Originally by: Adam Weishaupt Nobody? Hmm. Last night, I pondered becoming what I guess would have been your first customer because I just didn't want to make the trip to Empire to sell all my things...
Theres another fine point - You wanted to actaully *sell* your stuff. The BMBE is primary for people who want to hang on to their stuff - But is simply temporarily a little bit short on cash BIG Lottery
[u |
Adam Weishaupt
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Posted - 2006.03.07 19:26:00 -
[19]
Yes, you're right. If I suddenly had a chance to buy something that I absolutley had to have, I wouldn't have time to liquidate my inventory unless I had something highly mobile like Zydrine. Anything else I'd be taking a loss on by discounting to a point where anyone would snap it up. So if you accepted faction items as collateral (do you?) that might broaden the opportunity for customers a bit, I can imagine wanting to hold on to a Core-X Large Armor Rep but needing some cash in the short term. Faction items are fairly stable in price, aren't they? I normally recycle anything not very valuable I get from loot drops, which brings us back to my previous point. I suppose there are also cases when large stocks of minerals (capital ships, outpost platforms) should not be sold outright, but could be used as collateral.
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TornSoul
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Posted - 2006.03.07 21:30:00 -
[20]
Yes - We do accept factional loot, but... Only at their mineral prices, and not their 'real' market value.
The main reason for this beeing, that the admin burden of having to track every items 'real' market value, is simply too much.
Capital ships and (non-deployed) outpost platforms and a few other things as well will be included as allowed items for the BMBE in the near future (I just need the damn time to get it done...)
BIG Lottery
[u |
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Kerushi
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Posted - 2006.03.07 22:40:00 -
[21]
better use the pre-rmr tower prices as they are still around (just look at markets heh) ________________ I don't DO graphics, here's a sig anyway, wubwoo - Cortes lol thanks :-) |
Dark Shikari
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Posted - 2006.03.07 23:07:00 -
[22]
As I said, the system will not work unless the customers can keep their collateral.
As it stands, it is impossible for a customer to be reasonably trusted with that collateral.
Thus, until the contract system comes out, a loan program is impossible.
[23] Member: Official Forum Warrior
What's with the blue robots? Click my sig.
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Vaar
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Posted - 2006.03.07 23:59:00 -
[23]
What about getting NAGA in on this. The person taking out the loan could transfer the BPO to NAGA. NAGA could either build the ships and trade them back to the BPO owner or insist they be used internally in the Stepstone Project. Naturally NAGA would need to take a cut of it prehaps some of it coming from the interest generated by BIG and some from the BPO owner equivalant to a percentage of the buildcost. Surely if there is someone people will trust it is NAGA. Plus the owners would not lose their way of repaying the loan back.
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Distrans
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Posted - 2006.03.08 01:23:00 -
[24]
Originally by: TornSoul Yes - We do accept factional loot, but... Only at their mineral prices, and not their 'real' market value.
The main reason for this beeing, that the admin burden of having to track every items 'real' market value, is simply too much.
How is that? Cross-checking an escrow list with 10.001 basic items to me seems more of a burden than picking up one Machariel for 350M. Not to mention the collecting part in case the debtor fails to payback.
And market value: put some alts/corpmates in every empire region and have an eye on escrow (maybe shareholders can give a hand too, given their cut is increased ). I'm not sure if the "hidden" market for owners of unlisted items differs much in prices, but valuing collateral 75 or 50% decreases the risk quite enough. After a while You should get a feeling what the high-end faction loot is worth. Why not feed a database with that and have the averages shown on your homepage? That is something useful missing so far and would help with traffik / reputation.
Pulling NAGA or other producers with reputation in for the tII blueprints is a good idea.
It seems You must stick with the most precious goods for collaterals. Maybe You are going to have to close for some time before and after patches for markets to settle. Otherwise I see not that much a bigger risk or timesink in faction/tech II/~ bpos.
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Callan Skiderlar
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Posted - 2006.03.08 05:35:00 -
[25]
Perhaps the market needs some examples to understand the value of the service? Maybe you can list these on the BMBE site? For example:
K.R. Bear is in a small corp that runs a couple of POSs. They have stockpiled a great deal of fuel at their central base, enough for a month's worth of operations for both towers. They have recently discovered a moon nearby with moon minerals that complement their existing materials. Nervous that someone might anchor a POS there, they would like to quickly acquire a tower and claim the moon. A bit short on cash, they decide to place 3 week's worth of fuel on collateral along with some stockpiled raw moon materials right at their station. Within a week, they pay back the loan and are in business with 3 POSs.
Maybe case studies will help people understand how and when the service will be valuable. ---
Selling: Naglfars: 2.0B - build queue is: 2 Havoc Precisions: 300k per 1,000 Improved cloaks: 21M |
Mahrin Skel
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Posted - 2006.03.08 13:27:00 -
[26]
This is most potentially useful (given the need to hold the collateral) for exactly the kind of items you don't want to loan against: Faction modules and ships. These are assets of high value density, that someone isn't likely to use most of the time but would want to hang onto over the long term. A Navy Issue Battleship is a hangar queen, few people who have one fly it much, but it is readily sold on the escrow market for billions. The only practical use for factional modules is fitting out dreadnoughts and carriers, but they likewise have an easily realized isk value.
Any working asset simply can't be sacrificed for a loan, the player can make more money using it than with the cash he'd get from surrendering control. Under your current structure, this is only feasible with BPO's, which could be set by the BMBE to produce BPC's which the client could then use to keep the asset producing.
I'm not arguing whether the strictures and realities of Eve make it neccessary for you to hold the collateral, I'm telling you that this makes your service useless to 90+% of your potential clients. Both are unfortunate facts, that in combination make your planned business model untenable. Faction items are the *only* way out, as far as I can see.
--Dave
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Raem Civrie
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Posted - 2006.03.08 16:29:00 -
[27]
Previous poster nailed it right on the head. It'd mostly be HAC's and other t2 ships, or faction ships that I would broker in if I needed money, things that would not be easily replaced after I get money again. ---
Chairman of the Ice Mining Guild |
Argenton Sayvers
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Posted - 2006.03.08 17:09:00 -
[28]
I will give you reliable pricechecks on almost every faction item, ship and generally anything resellable for 1 share of your corporation. I will give the share back if i decide to discontinue this service for whatever reasons.
If you want the service for free, add Chingon and Snee to your addressbook, and simply ask for a pricecheck in modules channel when one of them is online.
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Baun
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Posted - 2006.03.08 18:10:00 -
[29]
So it seems like the consesus is the following:
By all means BMBE needs to keep the collateral but they need to loan against T2 items that do not recycle readily into minerals. This could be done with appropriate risk by observing the market price and handicapping the amount loaned and length of the loan in order to compensate for potential price fluctuations.
BPOs are probably still not feasible.
The Enemy's Gate is Down
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Rthor
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Posted - 2006.03.08 19:00:00 -
[30]
Maybe your interest charges are simply too high.
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