FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2008.02.15 17:20:00 -
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There seems to be some confusion over whether this is a Bond/Loan or an IPO/managed fund. The thread title says it's an IPO - but it appears to be offering to pay out a fixed rate of return (which is a bond-like behaviour).
Now, of itself, a fixed rate of payout doesn't prevent it being an IPO (for example, an IPO could be growth-based with a fixed nominal dividend paid out). The distinction between the two - and establishing which one this is - hinges on what happens to profit/loss above/below the fixed amount. On this I found the longer document less than clear. To quote:
"Profits in excess of dividend disbursements will be managed exclusively by the parent Corp of the administrator, Inquest, and re-invested into the Inquest Preferred Stock venture or presented to investors through special dividends."
This mentions "Preferred Stock" - but I could not find any mention elsewhere of what the Preferred Stock is. So, a few questions:
1. Does the value of shares rise and fall based upon the actual profit/loss made? If so, is this directly reflected in the price at which buy-back occurs?
2. What, if any, management fee is taken?
3. I note there's a guarantee of dividend payment (backed by substantial, but undicsclosed, assets). Is there any similar guarantee of share value?
4. Is there any fee associated with selling back shares?
I'm genuinely not sure whether this is a Bond paying a fixed rate - or an IPO with a fixed pay-out where the share value will rise and fall based upon actual performance after dividends have been paid. If the former (a fixed rate Bond) then a lot less information on how operations will be conducted is needed - and a lot more information on how dividends/buy-backs will be underwritten if a loss is incurred (i.e. prove you have the assets to meet your obligations if it gos wrong). On the flip-side of the coin, if it's an IPO, then clear information on what management fees will be charged - and an explanation of why having fixed ratios of minerals (rather than investing heavily in under-priced ones) would be useful.
All that said, it made a pleasant change to see a document which someone had actually put some thought and effort into.
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