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Marcus Baltar Savaran Zhayedan Spah	Posted - 2008.03.19 21:06:00 - [31] Originally by: Eefrit Originally by: Marcus Baltar ...how can you be offering a 2.5% dividend if in the previous breath you are stating the bonds are worth only half their original value. Marcus, there is a difference between what a BPO can return per month and what it would sell for. I BPO that makes say 500 Mill Isk a month may only sell for 7 Billion Isk (which would then be its value). /Eefrit Thanks I think I worded it wrong. I meant how can you say 2.5% if you previously say the principal is only worth half of its original value. 2.5% of 10,000 is 250, but 2.5% of 5000 is 125. I now realise you were probably thinking of the launch price in this example. Think I will get some sleep Player Stock Exchanges; Eve Galactic Stock Exchange (EGSE) & Real-time EVE Stock Exchange (RESX)
Eefrit Eve Financial Services	Posted - 2008.03.19 21:07:00 - [32] Edited by: Eefrit on 19/03/2008 21:10:20 Edit: added link Originally by: cosmoray Q: If you launch a bond, what is the definition? As I understand it, it is a guarantee to make a fixed payemnt schedule, and then repurchase the bond at full price on a fixed date. You understand it incorrectly. A bond is usually a fixed maturity investment but may be perpetual, which was always the case with both FIN and FIN-U. Perpetual Bond /Eefrit
Shadarle LI0NS Industries	Posted - 2008.03.19 21:37:00 - [33] Edited by: Shadarle on 19/03/2008 21:37:30 Originally by: Eefrit Edited by: Eefrit on 19/03/2008 21:10:20 Edit: added link Originally by: cosmoray Q: If you launch a bond, what is the definition? As I understand it, it is a guarantee to make a fixed payemnt schedule, and then repurchase the bond at full price on a fixed date. You understand it incorrectly. A bond is usually a fixed maturity investment but may be perpetual, which was always the case with both FIN and FIN-U. Perpetual Bond /Eefrit Bonds are generally, especially here in EVE, based on fixed returns. But more importantly, bonds are supposed to be limited risk investments where as stocks are high risk. In theory, a bond pays out less but it pays out consistent amounts with little to no risk to investors whereas a stock pays out a percentage of the profit, which could be huge in some cases, but passes on all the risk to offset the potential profit advantage. This is, at least, how we here in EVE tend to refer to the two. Of course after this I don't think bonds will be nearly as popular... seeing as how the fixed rates only appear to be fixed under optimal conditions and as soon as things go bad they vanish. Kind of removes the purpose of a fixed rate... I see quite a bit of turmoil in the IPO/Bond market here due to these two FIN/FIN-U threads... as if someone that was supposed to be a very respected trusted member of the community is able to twist around the rules then new members of the community are going to have a hell of a time convincing people to trust them.
FastLearner Fury Holdings Brutally Clever Empire	Posted - 2008.03.19 21:51:00 - [34] Edited by: FastLearner on 19/03/2008 21:52:23 Originally by: Eefrit FastLearner, I suggest you read the risks section of the document as well. Value has indeed fallen to an extent that the buffer can't cover it. In fact this was made clear about a year ago in an announcement to investors. The risks section of any business plan is an "if.... then" setup. Assumptions are made and then how things will operate if those assumptions hold true is stated, as well as what the recourse would be if the did not hold true. The current situation being that they did not hold true. /Eefrit I have read the Risk section. It basically says that if BPO prices fall then investors may lose out if an Exit Strategy happens. Nowhere does it say "if things go wrong then I can keep the scheme running but no longer have to honour my obligations". The document is fairly clear: the options available now are either: 1. Use the defined Exit strategy - i.e. trustees liquidate collateral and refund investors. Obviously if not enough ISK is raised then investors bear the loss - that's pretty explicit in the document. 2. Change the interest rate - at which stage you have to, by your own rules, offer a buy-back to anyone who wants it. Your should really get someone like Ray to do a proper valuation on the BPOs. Recently a lot of T2 BPOs have been trading for 3-4 years profits. If FIN is making 2-3% profit on IPO value then it's pretty likely that the BPOs would actually sell for sufficient to cover a full refund to investors. The problem I'm seeing with T2 BPOs isn't so much that their sale value has dropped as that the profit they generate has fallen hugely. It's pretty much unknown for a BPO put up for open auction to sell for less than about 18 months profit. The danger for investors with option 2, but no independent valuation of assets, comes IF the value of the BPOs is actually at or near to their original investment. In that circumstance redirecting profits towards NAV serves only to reduce YOUR exposure - without giving them any extra ISK at all, even in the long term. But, as I already pointed out, by your own rules any reduction in dividends needs not just shareholder approal, but also for you to offer a buy-back to anyone who wants it. Unless you can point me to anything in the document which explicitly (or even implicitly) allows clause 4.1 to be ignored. When, other than in failure, would the interest rate be lowered?
Eefrit Eve Financial Services	Posted - 2008.03.19 21:55:00 - [35] Originally by: Shadarle Bonds are generally, especially here in EVE, based on fixed returns. Originally by: Shadarle This is, at least, how we here in EVE tend to refer to the two. Shadarle, it would really save us all some time if you got educated before speaking. Here is some homework just for you: Go look up which corp issued the first public bonds in Eve. Then go look up who the first 3 corps were. Then you can come back and take your foot out of your mouth. /Eefrit
Eefrit	Posted - 2008.03.19 22:07:00 - [36] Originally by: FastLearner The document is fairly clear: the options available now are either: 1. Use the defined Exit strategy - i.e. trustees liquidate collateral and refund investors. Obviously if not enough ISK is raised then investors bear the loss - that's pretty explicit in the document. 2. Change the interest rate - at which stage you have to, by your own rules, offer a buy-back to anyone who wants it. Your should really get someone like Ray to do a proper valuation on the BPOs. Fastlearner, I rechecked the document and it would appear that you are correct here. Although that was not the intention when it was written, the wording is clear that your interpretation is correct. The only issue I see is that there is an unintentional loophole in that a time frame for buying back the bonds at IPO was never given - which it probably should have been. I will take the matter under advisement and get back to you and everyone else on it before any vote is put into place. I would ask that any shareholders that have a problem with a vote changing the interest let me know via evemail along with how many bonds they hold. Regarding Ray valuing the BPOs, both him and myself have already discussed that in the earlier parts of this thread. Essentially the market history gives something to work with when selling similar BPOs to what have recently sold. A large amount of the BPOs in question have no recent comparison to make, and hence the only reasonably accurate way of doing it would be to sell them. I am more than happy to hand everything over to either the trustees or someone like Ray (if the shareholders agree) to take over or liquidate going forward, but making that decision right now would be premature. /Eefrit http://oldforums.eveonline.com/?a=topic&threadID=399241 Please visit your user settings to re-enable images.[/url]
FastLearner	Posted - 2008.03.19 22:12:00 - [37] The FIN-U position is somewhat trickier. The commitment to 8% until July is cast in stone, but the buyback situation was written in a fairly ambiguous way: "e) FIN-U will offer a conditional buyback policy if after July 2008 the returns drop to below 6.0%. The conditions are as follows: i) If the interest falls below 6% after July 2008, a thread with buyback reservations will be opened within a week from the end of the month that the interest droped to below 6%. ii) That thread will be open for buyback reservations for a period of 2 weeks after which no more reservations will be accepted. iii) FIN-U will buy back bonds at 95% (950,000 Isk) each at a rate of no more than 5% of the total investment per month until all bonds reserved for buyback are bought back." The key is how ii) is interpreted. It can be read two ways: a) That the buy-back commitment is to buy back whatever bonds have been listed for buy-back up to maximum of 5% of investment per month, b) That there's not actually a commitment to buy back anything at all (other than, maybe, a nominal 1 share per month). It would appear that Eefrit is now claiming that when he wrote that he intended it to mean that he didn't have any meaningful obligation to buy-back at all - which doesn't seem a very above-board approach to me. Writing a buy-back clause which people will read, in good faith, as an offer to buyback 5% of investment per month - when, by use of weaselly wording, you're intending not offer a buy-back at all is getting pretty close to being dishonest. If the intent was for no commitment to buyback to be made then that should have been explicit - e.g. "A buy-back thread will be opened and I may, if I feel like it, buy back some bonds (but no more than 5% per month) or then again I may not bother buying any back at all." But that might have negatively affected sales - a bit like clarifying that "zero risk" actually meant "a significant risk" would have done for FIN.
Taloic Black Watch Regiment New Eden Conglomerate	Posted - 2008.03.19 22:47:00 - [38] Eefrit if option 2 is what you believe is the better choice im placeing my vote there also. I have 1 bil invested with you and its been a good investment. You have not lead us wrong and have done an excellent job man. Let the armchair lawyers do their thing just dont place to much into their words. ************************** 2a) Drop dividends to actual profits (closer to 3-4% at present) b) I will use my personal income to try buy back bonds at IPO price as fast as is possible rather than use it to try and bring the dividends up to 7%. I expect that this would be complete in less than a year, at which point all investors would have their full investment paid back. c) I realise some people paid a premium buying from third parties, but that is a risk they took. Everything has always been structured around IPO prices which included any buyback option in the initial investors agreement.
cosmoray	Posted - 2008.03.19 23:40:00 - [39] The buy back clause in this instance is a very clever way of keeping capital. If FIN-U/FIN offer to buy back 5% of the bonds each month over 20 months whilst paying no dividend, Erefit only needs to make 5% profit to not pay back any capital. I will say that again. If Erifit make 5% profit on 400B (or whatever valuation) each month, he uses this interest to buy back 5% of the shares. After 20 months 400B richer. Welcome to the trillionaire club. It is interesting that Erifit is using semantics and smallprint to change the rules because we mortals don't understand his slippery document. Anyone want to buy a photocopier?
Segge Bolled Dirty Sexy Pilots	Posted - 2008.03.20 06:44:00 - [40] Oh. I've been reading this since it went up and I've only just realized I actually own (a mere) 1,500 shares (FIN). After some thought, Option 2 please.
Shadarle LI0NS Industries	Posted - 2008.03.20 07:15:00 - [41] Originally by: Eefrit Originally by: Shadarle Bonds are generally, especially here in EVE, based on fixed returns. Originally by: Shadarle This is, at least, how we here in EVE tend to refer to the two. Shadarle, it would really save us all some time if you got educated before speaking. Here is some homework just for you: Go look up which corp issued the first public bonds in Eve. Then go look up who the first 3 corps were. Then you can come back and take your foot out of your mouth. /Eefrit So the first person to do something sets all the rules for the rest of time, no evolution at all? Good to know. We've had a lot of discussions here about the differences in bonds and shares, you'd know that if you ever posted here anymore. The majority of people who discussed the topic settled on those generalities about bonds/shares. There are of course always some businesses which don't fit perfectly into either camp, but those are the general rule around here when naming something. Perhaps way back when things were different... but for as long as I've posted here bonds and shares have been quite different beasts. And I am now a shareholder, just FYI. Apparently someone here wanted you to have to listen to me, because I received some shares for free recently. I am not sure who this individual was, they did not inform me of the transfer... I just noticed I received divs from you which meant I had some shares. But clearly as much as you'd like to ignore me, at least one of your investors doesn't want you to.
SonOfAGhost Minmatar Munitions and Tactical Assets Repository Zzz	Posted - 2008.03.20 11:35:00 - [42] Originally by: Ray McCormack Originally by: Shadarle And remember, if it takes 6 months to sell the BPO's off then you're tying up all that money for 6 months. Valuing at 4% that is ~25%. So by holding the BPO's for longer you have to at least make ~25% more or it wasn't worth the time waited. Of course that would need to be evaluated, but you'd never be able to tell for sure. 25% may well be possible, though, but it's something that would need to be measured as the liquidation is in process. This assumes no cash is paid out until all sales are complete. The opportunity cost would be much reduced if payouts were done via dividends as sales were made rather than a share buy-back at the end. Originally by: CCP Explorer This is intended, to not clutter the overview with information that new players don't need in their first few hours. (on stargates not being on overview)
SencneS Rebellion Against big Irreversible Dinks The Cyrene Initiative	Posted - 2008.03.20 17:11:00 - [43] I'd welcome a slow buy back of Stocks. For FIN it's 9,500 per. cosmoray has a pretty decent idea. Halt dividends, still run what you can and whatever profit is made for the month buy back back that amount of stocks. I think what gets on most peoples goats is not the fact it not pushing out Dividends at the same rate, it's the fact the "bond" doesn't have the same value. Speaking for myself I've taken all the dividends you have given me, but I still consider the share of a value that I paid for it. You're saying the NAV is not there anymore, but offering 2.5% dividend. I'd rather take comfort in knowing it's still worth what I paid for it and sell them off slowly over time at that value. In the end you did everything you could but CCP just wreaked the T2 market too much to recover. You're not the first and will probably not be the last IPO to fall victim to CCP. If people get 10,000 per share in a buy back they can't have an issue, they got their original purchase price but all the dividends you gave. In all honesty they have nothing to complain about. Amarr for Life
Zorrill Great Gig in the Sky	Posted - 2008.03.20 19:54:00 - [44] I am a FIN shareholder to the tune of some 700 odd M isk. I will be voting for option 2 when the opportunity arises, as I am happy for you to continue to manage my investment. Whatever decisions you may have made regarding purchase of T2 BPOs, you clearly want your investors to get as much as they can, whilst keeping the hit you yourself take to a minimum. I would like the trustees to do a valuation of the BPOs held however in the interest of fuller disclosure, this would not affect my vote but I feel that it is information that is reasonable to ask for. Or perhaps Ray could do it if he's willing? I would also like to know what the feasibility of implementing your limited buyback scheme is in conjunction with the reduced dividend? My understanding of the scheme was that you would buy back 5% (5 billion ish) per month at 95% value. Would it be possible to manage this using sales of the lower return/actual value BPOs? This could speed your return to better profitability whilst removing your disaffected investors if I am thinking it through correctly, but you would need a more accurate projection of NAV to consider it. Just my two penn'orth
Elias Riikonen Aliastra	Posted - 2008.03.21 07:18:00 - [45] Originally by: FastLearner Not sure a bout FIN-U, but here's a few things from the FIN launch document: "After the first 3 months of operations, we will create a thread where investors can post on a waiting list to have their shares bought out by EFS under the following conditions: 1. A buy order will be placed for a minimum of 1 Bill Isk or 5% of the invested capital (whichever is the greater) with the EGSE every month pending the other conditions." So there should already be a thread for FIN customers to register to sell at 95%. Contrary to what is stated in the OP, the obligation was very clearly to buy back 5% of shares per month (if requested) at 95% of IPO price. I for one wish to hereby request that my 1b of shares be bought back at 95% IPO value. Eefrit, if you don't accommodate this request, can you explain your choice to be something else than breach of contract?
Eefrit	Posted - 2008.03.21 09:27:00 - [46] Originally by: Elias Riikonen I for one wish to hereby request that my 1b of shares be bought back at 95% IPO value. Eefrit, if you don't accommodate this request, can you explain your choice to be something else than breach of contract? There is already a waiting list which has been bought up steadily over time and clearly I am not about to comply with your request immediately as you are nowhere near the top of that list. At present something like 60 Billion Isk worth has been bought back under that policy. /Eefrit http://oldforums.eveonline.com/?a=topic&threadID=399241 Please visit your user settings to re-enable images.[/url]
Eefrit	Posted - 2008.03.21 09:28:00 - [47] Thanks for all the sincere feedback so far. I will be going away for the long weekend and will only be back on Sunday evening or Monday morning, so I will not be able to respond until then. Sincerely, Eefrit http://oldforums.eveonline.com/?a=topic&threadID=399241 Please visit your user settings to re-enable images.[/url]
Umbriele	Posted - 2008.03.21 09:41:00 - [48] As a shareholder, is it possible to exchange my shares for assets? i.e. T2 blueprints Please visit your user settings to re-enable images.
Elias Riikonen	Posted - 2008.03.21 09:44:00 - [49] Originally by: Eefrit Originally by: Elias Riikonen I for one wish to hereby request that my 1b of shares be bought back at 95% IPO value. Eefrit, if you don't accommodate this request, can you explain your choice to be something else than breach of contract? There is already a waiting list which has been bought up steadily over time and clearly I am not about to comply with your request immediately as you are nowhere near the top of that list. At present something like 60 Billion Isk worth has been bought back under that policy. Ok, sorry, I got the impression from the previous discussion that that list did not exist. Is there a link available to the list?
Sofitia Mourtos	Posted - 2008.03.21 11:51:00 - [50] Originally by: Eefrit Here is some homework just for you: Go look up which corp issued the first public bonds in Eve. Then go look up who the first 3 corps were. I am sorry for going completely off-topic here - but where would you actually find this information ? (I am interested from a research point of view). Did anyone do it before I did ? ---------------------------------------- WTB: Guardian BPO
HayesDuSid	Posted - 2008.03.21 13:06:00 - [51] FIN-U investor, going with option 2 Please visit your user settings to re-enable images.
4rc4ng3L	Posted - 2008.03.21 13:51:00 - [52] FIN-U investor.... i want to reconfirm my decision for option 2 ------------------------------------------ - To Jumanji, or not to Jumanji...... -
Matti Leesonen ORIGIN SYSTEMS Atlas Alliance	Posted - 2008.03.21 15:46:00 - [53] Fin-U investor. I'm going with option 2 --Shiny!--
Major Stallion Dragons Of Redemption Triumvirate.	Posted - 2008.03.21 16:35:00 - [54] am i correct in assuming that option 2 will pay back the full value of the IPO on every share owned...essentially like a full refund of the IPO price? If so, i'd have to vote for option 2..
lotrias	Posted - 2008.03.21 17:42:00 - [55] fin-investor going for option 2.
Helix Fluxx	Posted - 2008.03.21 18:01:00 - [56] Being as I only purchased my FIN shares recently from another shareholder (I detect a hint of insider information or rat leaving sinking ship), I've not yet recieved what I feel to be an adequate return on my investment. I'm certainly not willing to make a loss on it yet, so option 1 is right out at this time. I'm going for Option 2, although I'm disappointed to have read in other threads hints to the effect that there were times when FIN was making more money than was expected, so unless my understanding of the distribution is wrong, all of that extra money went to shareholders. Was nothing set aside in reserve to cater for leaner times?
Ginea Moya O.P.T	Posted - 2008.03.21 19:26:00 - [57] Fin-U and Fin small time investor. Option 2 on both. What we would have if I were all here and not all there.
Dal Thrax Multiverse Corporation Cosmic Anomalies	Posted - 2008.03.21 19:52:00 - [58] I wonder if FIN-U might be better served by option 3. Convert to a stock with target divs of 4% of NAV and reinvest any extra isk into the company (raising NAV, raising returns. . .). From what I see on this forum many bond holders value an isk source from a going concern. Dal Originally by: HEXXX In all seriousness; I think I made a miscalculation originally. . . We either need to fix this or fix our advertising.
CrazyCoolie Lucky Hydra Corp SMASH Alliance	Posted - 2008.03.21 22:17:00 - [59] As an investor in Fin-U i vote for option 2. Eefrit thx for all your hard work and will invest with you in the future Coolie
Margret Putnam Science and Trade Institute	Posted - 2008.03.22 03:37:00 - [60] Fin: Option 2

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