Neidhardt Foster
University of Caille
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Posted - 2008.08.07 08:12:00 -
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I'm pretty new to the game and haven't invested in any IPO yet, so if you think this disqualifies me from posting something meaningfull in here, please ignore this post.
I don't know about insurances for IPO/shares in rl, the way I understand it is: They are a more risky investment than others and they make that risk worthwile by giving a possibly better ROI. There are possibilities to "insure" your investment by using warrants, which is not what this idea (as I understand it) is about.
The problem I see on MD is: There a too many people with a lot (too much, would be too harsh) of ISK and only few possibilies to invest this money. That seems to be the main reason why the clearly laid out terms of investing in an IPO (Shaddarle et al) are ignored from time to time. You would only increase this problem by introducing another big investor (ie. the insurance fund).
On the other hand you would base an insurance on a lot of (atm) not public available data, especially the risk estimate. If you have this kind of information, why not try a more solid approach to Auditing instead? Why not found an agency that is specialized on estimating the risks of an IPO? This service wouldn't be free of charge, but something most IPOs must pay as part of their PR-expenses to get investors even interested.
If you still want to have an insurance approach, I think warrants are a better way than a global fund. Example: I buy shares from the new [SCAM] IPO and EBank (or some other big, trusted market-player) offers a warrant that he buys back the shares at the price I paid for them, at a specified time. The cost of the warrant would be determined (again) on the risk estimate.
As a sidenote: I find it funny, how many posters in here scream "that happens only in Eve, that wouldn't happen in a real, regulated world". Do you guys honestly believe, that all those billions of cash in the real world are earned with obeying the laws and playing fair? Scam is quite real in rl, its only easier in Eve (because people throw around their money much more freely, not because of the anonymity of the internet). I must admit that I lost quite some (real) cash in shares I bought because of faked financial statements, so I might be a bit biased in that regard.
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