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Thread Statistics | Show CCP posts - 1 post(s) |
EFS Manager
Eve Financial Services
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Posted - 2006.12.06 15:32:00 -
[1]
 Originally by: Baun
5. You pay off the loan (primarily from its own production) and walk away with a fully owned t2 BPO.
I would disagree with you there. Very few if any BPOs sell lately with a yield of more than 6%, and most with only a 4-5% yield. Taking into account that you can expect say 5% per month of the purchase price to come from the production of the BPO (assuming it is 24/7) you will really be loosing Isk buying this way unless you get a REALLY good deal on a BPO.
The lowest interest that BMBE is now charging (according to them) is 1.9% per week, but seeing as for this loan type they charge you interest on the amount you have paid back as well, the actual interest you are paying is effectively more along the lines of 2.85% per week effective. The other loan type (fixed interest) is 2.9% per week.
So the best effective interest that you can hope for is 12.21% per month (30 day month). So in a situation where you are earning 5% per month from production and paying 12.21% per month, you are actually loosing over 7% per month.
Now, if you have that 7% per month you would be far better off just saving it up until you had enough Isk to buy the BPO outright.
So what has changed? The answer is BPO prices. It used to be common to buy a BPO for a 12-15% yield, but in the last 6 months that has changed drastically.
The other question that I have that BMBE seems conspicuously silent on is the issue of their fee for managing these loans. Initially their fee was really half of the distributed profit each month, but that was when they were going to provide lots of small loans which required a lot more work.
Right now the work needed to manage loans on BPOs is inconsequential compared to the initial plan, yet the fee remains ludicrously high! Most other public companies charge a 10-15% management fee and that is where HUGE amount of work are needed. STUFF for example get charged a 10% fee by Dark Shikari, and that job takes a significant amount of work every day and not just a once a week check to see if interest was paid.
I don't expect TornSoul to give up this cash cow at all, even though it is in my opinion unethical to continue with something that has paid next to nothing over it's life to the investors but was sold on promises of massive returns. I'm afraid investors and clients are both getting the short end of the stick... Sorry to see a good name be flushed down the toilet.
Sincerely,
EFS Manager
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EFS Manager
Eve Financial Services
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Posted - 2006.12.06 21:16:00 -
[2]
Originally by: Ray McCormack
Also, discussion on this matter is best kept in a Shareholder's Report thread.
The issue has been raised numerous times in many threads, and so far there has not even been an attempt to answer it that I know of.
People agreed to such a disproportionately high fee when they were promised returns in the region of 10% per month (actually it was more than that). That fee is no longer even vaguely justified and not answering legitimate concerns regarding it is a huge endictment on BMBE in general.
Sincerely,
EFS Manager
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EFS Manager
Eve Financial Services
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Posted - 2006.12.07 18:13:00 -
[3]
One thing I will say in BMBE's favour is that Ray is communicating with shareholders much better than was the case before.
Ray, thanks for taking the time to answer what you can and for making it look like BMBE is not just ignoring everyone (although I still think that TS needs to answer the question of fees).
/EFS Manager
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