| Author |
Topic |
Hexxx
Minmatar |
Posted - 2007.11.04 02:46:00 - [ 31]
 Originally by: FastLearner
I personally run both types of offerings: Fury Holdings is a share (payment to shareholder is based entirely on how well FH performs) and Fury Bank is probably best viewed as a Bond (the return is a fixed rate - with FH underwrititing it - so in a bad month Fury Bank depositors get their fixed rate and FH shareholders get a redcued profit or even a loss). Unfortunately a lot of individuals seem to have a problem distinguishing between the two - and mislabel or misrepresent what they're offering.
The problem occurs largely because many "players" in the market have no idea of the distinction between the two - or even of why the two are different. Equally many don't appreciate the difference between a guaranteed return and a target return.
Too many corporations think that issuing a share followed by paying an arbitrary amount each month is fine - it's not. When dividends are based on profits then there's a duty owed to shareholders to demonstrate what those profits actually are - and many corps fail miserably at that. The current market is a mix of people who don't know better and those who take advantage of the ignorant.
I wrote a thread dedicated to the definition of Bonds vs. Shares because of this very same concern. Unfortunetly...what you're saying here is still true. Bonds are pretty simple...it's shares that seem to be causing "problems" for people. There's a strong desire to "guaruntee" a return...even if a business has an unprofitable month. This is BAD! |
Motivated Prophet
Zerodot Schools
|
Posted - 2007.11.04 03:13:00 - [ 32]
Originally by: FastLearner
Too many corporations think that issuing a share followed by paying an arbitrary amount each month is fine - it's not. When dividends are based on profits then there's a duty owed to shareholders to demonstrate what those profits actually are - and many corps fail miserably at that. The current market is a mix of people who don't know better and those who take advantage of the ignorant.
Your statement of "the current market" would seem to lump ZERO. in there. Was that intended? MP |
FastLearner
Fury Holdings
Brutally Clever Empire |
Posted - 2007.11.04 03:36:00 - [ 33]
Originally by: Motivated Prophet
Originally by: FastLearner
Too many corporations think that issuing a share followed by paying an arbitrary amount each month is fine - it's not. When dividends are based on profits then there's a duty owed to shareholders to demonstrate what those profits actually are - and many corps fail miserably at that. The current market is a mix of people who don't know better and those who take advantage of the ignorant.
Your statement of "the current market" would seem to lump ZERO. in there. Was that intended?
MP
I've paid little attention to ZERO (not having shares in it) so have no clue whether you fit either of the categories. My comment was, of course, over-stated - as obviously not ALL of the market are ignorant, incompetent or exploiting those who are. Perhaps a better statement would be "much of the current market ..." at which point any interested party can decide for themselves which corporations the cap does/does not fit. I can state with for sure that ZERO wasn't in my mind when I wrote the post. If your corporation has a clearly defined share/bond, doesn't have inappropriate "guarantees" and properly reports on profits (if it's a share not a bond) rather than just handing ouit some profits and hoping the shareholders are happy with it then none of my comments apply to you. My comments were intended to be general in nature (if I want to attack a specific corporation then I have no qualms over actually naming them). |
Shadarle |
Posted - 2007.11.04 03:36:00 - [ 34]
Originally by: Motivated Prophet
Originally by: FastLearner
Too many corporations think that issuing a share followed by paying an arbitrary amount each month is fine - it's not. When dividends are based on profits then there's a duty owed to shareholders to demonstrate what those profits actually are - and many corps fail miserably at that. The current market is a mix of people who don't know better and those who take advantage of the ignorant.
Your statement of "the current market" would seem to lump ZERO. in there. Was that intended?
MP
Yes, it also includes FuryBank, which FL himself runs. So get over yourself and don't assume everything is a direct attack on you. It's not like your ventures have exactly set fire to the market with amazing dividends or even an expectation that there will be a dividend. The fact that there may be exceptions to what he said doesn't mean that he is wrong. It also doesn't mean he is right. I'd say the majority of the people in the player run market, investors and ceo's, are not very knowledgeable about financial terms. Such as the difference between bonds and shares. But honestly I don't know if we should be expecting people to know this kind of stuff. It's a game. As long as people are good at playing that game and can earn a profit that is enough for me. Now if someone can do that and can show an understanding of financial concepts and find a use for that knowledge then that is a plus and they will get more of my money. More important than knowledge is the ability to communicate. Communication is the second most important part of an IPO behind profit imo. |
Ricdic
Caldari
Caldari Provisions
|
Posted - 2007.11.04 04:11:00 - [ 35]
Yeh it seems the standards have definetly been raised. I don't have a problem with this (as I don't plan to be running any further IPO/Bonds), however in line with the industry changes I have tried to put some effort into increasing returns under TCCS and C-R-A. With C-R-A it involved a price increase on our customers. With TCCS it's a little more difficult as the capital/freighter market is a little difficult to work with at the moment. So all blueprints are in research and the normal operational capital (read: for materials building the ships) has been diverted into a small t2 component production wing.
Anyway time will tell how increased expectations affect the market as a whole. I worry a little that we have standardised a higher rate of return partially due to Fastlearner's bank returns (nothing wrong with this, it's fantastic you can pull those returns). But I think the balance will work well, with EBANK on the lower end of the scale. Either way our differing corporations are both seeing great levels of growth so competition isn't an issue (as I once expected it would be).
I just think higher expectations may result in corporations failing to meet their promises and/or projections. Places like CAP4U where market changes affected corporate profitability.
I guess we need to ask the question
1) Do we want people to tell us better return and risk failing to provide them and/or dividending NAV rather than profit?
2) Are we as a market still comfortable accepting the 5% return corporations when they have specific terms attached to them (ie special securities and the likes)?
Chances are this will turn into an (if you can't make XX profit you are a bad trader) but let's accept the fact that some people do things differently and not everyone has the same levels of skills as the other. C-R-A spent some time in a slump producting extremely low dividends closer to 3%-4%. This was accepted by it's shareholders at the time probably more because of the service it was offering to Eve.
Either way I think we are going to see a new wave of high return investments and with the release of these we will also see a new wave of business failures (not scams). Of course, this is completely my opinion. I don't want it to happen however it is something I worry about as our expectations (in terms purely of dividend) keep rising.
(to the inevitable Ezoran sarcastic response, be advised I won't reply to you) |
Roemy Schneider
Vanishing Point. |
Posted - 2007.11.04 05:17:00 - [ 36]
raised standards...? i was more under the impression they were falling.
but then again... proton was one of my first investments well beyond 10%, then there were nyphur and ionia with their 10%'ers and i had quite a few billions tied up in private arrangements on that very same level (therefore my huge disappointment in the oh-so-clever-and-able ISS)
"making business" with T2 producers, customers etc has been replaced by pure ingame mechanics: invention and the involved formulae/drop rates/skills determine prices these days, not the people (well... you get my drift).
sure, there's still faction stuff; but auctions have slowed that down considerably (i still believe auctions should require contracting IV if not V)
all in all i'd say the markets have slowed and with it the profits/divies/whatever |
Ricdic
Caldari
Caldari Provisions
|
Posted - 2007.11.04 05:57:00 - [ 37]
Originally by: Roemy Schneider
raised standards...?
Yeh by that I mean the standard that the public expects. 1 year ago they public wouldn't have expected an 8% or 9% return corporation to be the norm. Now it is going in that direction. That's all I meant |
McRuder
Gallente
The Pit Crew |
Posted - 2007.11.04 08:12:00 - [ 38]
Due to the nature of financial business in Eve, there seems to be some confusion over shares, dividends, etc. Most of the IPO that we have in Eve rather falls into the Bond category. Reason being that IPOs request a specific amount of isk, on which they promise a fixed % return. In essence they request a loan from the public, and they pay a fixed interest back. This is not really an IPO - an IPO issues public shares in a corporation, to which the holders are entitled to a dividend. A dividend is technically a share of the profits of the corporation and not a fixed interest payment. Some corporations may guarantee a minimum/maximum % of profit, and others offer a fixed % of interest. Either way the investor gets a certain amount of isk return on his investment.
As was said previously in this thread: the general public do not know the difference. Not that it matters too much either. This is not RL, and terms are liberally applied to whatever seems to fit the situation. Any shrewd investor will quickly realize the difference and make his/her decisions based on the factors, not just on the confusion of terms used. |
northwesten
Amarr
Trinity Corporate Services
Terran United Federation |
Posted - 2007.11.04 08:24:00 - [ 39]
Edited by: northwesten on 04/11/2007 11:10:01 Originally by: McRuder
Due to the nature of financial business in Eve, there seems to be some confusion over shares, dividends, etc. Most of the IPO that we have in Eve rather falls into the Bond category. Reason being that IPOs request a specific amount of isk, on which they promise a fixed % return. In essence they request a loan from the public, and they pay a fixed interest back. This is not really an IPO - an IPO issues public shares in a corporation, to which the holders are entitled to a dividend. A dividend is technically a share of the profits of the corporation and not a fixed interest payment. Some corporations may guarantee a minimum/maximum % of profit, and others offer a fixed % of interest. Either way the investor gets a certain amount of isk return on his investment.
As was said previously in this thread: the general public do not know the difference. Not that it matters too much either. This is not RL, and terms are liberally applied to whatever seems to fit the situation. Any shrewd investor will quickly realize the difference and make his/her decisions based on the factors, not just on the confusion of terms used.
Well i have to agree here! I will put my hand up and saying I misunderstood about shares and bonds. I thought i started an ipo but as a fixs return. I thought IPO is that you get investment but pay like for 5% make good profit. i was going to use the profits to expand it etc and also use it for corp project such as freighter which i can make it easyer to supply or move supplys around and invest it in a moon mining project etc to again increase profit but invest keep the 5% return. Ok bare with me on this but as for shares I get 200mil from investor I go and do trade and i make 350mil so 150mil is profit. So I use the 150mil to pay investment but next month i make 270 so the 70mil profit again go to investor? bond is well a loan which finxed rate like 3 months long etc. I mean i interested in doing this stuff and looks like more of a challenge than PVP that's why i so interested but too dam nervous to **** up if i didnt understand this right. Also a Question is there a channel you can speak to well known player on this suffer than can answer noob questions? |
Robacz
Essence Enterprises
|
Posted - 2007.11.04 09:44:00 - [ 40]
In real life you can invest with great security and lower returns, a bit lower security and higher returns or low security and highest returns. Why it should be different in Eve?
I considered ISSO to be "absolute security" investment, therefore I accepted lower dividend and was happy with it. I knew that ISSO won't disappear when one guy get hit by RL (which is problem of 90% of other ventures), I knew they won't scam their investors, I knew they will always pay at least 5% as they promised. You can disagree with that it you wish, but for me ISSO was/is very trustworthy entity - secured investment with lower returns.
If I want to risk more, I will invest in some of guys posting on this forum and I will request higher return. If I want to risk even more, I will invest to newcomers and request even higher returns. |
Ionia
Advanced Manufacturing |
Posted - 2007.11.04 11:29:00 - [ 41]
It is simply a matter of what is available. Look at returns vs stock price and you wont see anything at 7%. I think people had gotten used to investing for a better return because of what was available on the market, but much, FRPB included, has sold out, so the returns will probably drop back to the 5% range for a while I suspect. |
Matalino |
Posted - 2007.11.04 15:16:00 - [ 42]
Originally by: Ionia
It is simply a matter of what is available. Look at returns vs stock price and you wont see anything at 7%. I think people had gotten used to investing for a better return because of what was available on the market, but much, FRPB included, has sold out, so the returns will probably drop back to the 5% range for a while I suspect.
I think that Datacore Harvesting will help to hold those expectations high for atleast a few more months. I will be looking to raise about 20 billion between now and the middle of Dec. Then depending on market forces, another 5 - 20 billion in Jan through March. That should help keep expectations around the 8% per month range for a little longer. If anyone else tries to start anything, they will likely be affected by that standard, just as I was affected by the standard that you had set, thus pushing it along for a few months further still. I think that we will need a steady break in new offers before the standard returns will drop again. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 17:25:00 - [ 43]
Originally by: McRuder
Due to the nature of financial business in Eve, there seems to be some confusion over shares, dividends, etc. Most of the IPO that we have in Eve rather falls into the Bond category. Reason being that IPOs request a specific amount of isk, on which they promise a fixed % return. In essence they request a loan from the public, and they pay a fixed interest back. This is not really an IPO - an IPO issues public shares in a corporation, to which the holders are entitled to a dividend. A dividend is technically a share of the profits of the corporation and not a fixed interest payment. Some corporations may guarantee a minimum/maximum % of profit, and others offer a fixed % of interest. Either way the investor gets a certain amount of isk return on his investment.
As was said previously in this thread: the general public do not know the difference. Not that it matters too much either. This is not RL, and terms are liberally applied to whatever seems to fit the situation. Any shrewd investor will quickly realize the difference and make his/her decisions based on the factors, not just on the confusion of terms used.
this is an excellent point, of which i'm not sure if a lot of people have thought it thru -- how much does a loan for 10b, 50b, 100b cost? what is the interest rate a venture would be paying if they went and got a loan? is it 4%? 5%? 10%? do we occasionally see huge dividend spikes? i mean, how would this corporation survive if they had a loan with a 10% interest/month, if they can't generate more than 5% profits? is it poor management of funds? are people biting off more than they can chew? are folks pocketing huge chunks of profit and only reporting parts of it? what IS the going rate for a 10b, 25b, 50b, and 100b loans? anyone care to give a rough guess? now, compare that to the corporations paying divs. how many of those corporations are reporting enough profit to have actually paid on those loans, from just the profit? guaranteeing a minimum return, in order to get investor isk, in this game, is probably a side effect from scams, and ****ty div-giving corps. the problem is if all you ever see is that guaranteed minimum amount. a good corporation, logically (i would think), should pay out divs at a price close to what a loan for the investor billions would have cost. i understand that a reason for saying "i am doing an ipo" would be to get billions of isk for a interest rate lower than what a loan would've cost you. how does that help me, the investor? what about these corporations, run by asshats in their spare time, that don't even turn a profit? or go months without turning a profit? how would they have done if it HAD been a loan? things like this ARE items to consider when you're saying something is a good or bad investment. if a corp can't even pay a dividend, or pay a decent dividend; i'm sorry, but that does speak ill on the people running the corp. lv, whether you support his decision or not, has recognized that the profits on the cap business aren't at a good level and is re-structuring (or whatever you want to call it) in order to TURN a profit in another fashion. if the public venture that someone is running isn't making a decent profit (thereby doling out high divs); is it because the people behind the corp are lazy? stupid? incredibly slow to react to game changes? just some items to mull over. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 17:37:00 - [ 44]
Originally by: FastLearner
When dividends are based on profits then there's a duty owed to shareholders to demonstrate what those profits actually are - and many corps fail miserably at that.
the first part sounds reasonable, the second part sounds true. |
Shadarle |
Posted - 2007.11.04 17:41:00 - [ 45]
Originally by: Ezoran DuBlaidd
a good corporation, logically (i would think), should pay out divs at a price close to what a loan for the investor billions would have cost.
I disagree. If someone wanted to pay that level they'd just take loans from people. People usually start IPO's for other reasons. They want to build their rep, they think it would be fun, it is something new to do, they can pay lower divs, they are role-playing, etc. Remember, loans in this game are a bit different than in RL. To get a loan you generally need to secure it with an item. Say someone has a BPO worth 2 billion. In order to get a 2 billion loan you have to let the person loaning you the money lock down your BPO. This way they have security, you can still use the BPO, and you have 2 billion isk to work with. You do this assuming you can make over 10% per month for example (or whatever the rate is) with the 2 billion. And with 2 billion isk this is easy, you can easily make 20-30% or far more. This changes with 100 billion isk. It becomes much harder to make 10% then. I think almost every loan that is given is for smaller quantities of money as it then becomes easier to make a high RoR on that money. So don't confuse loans with IPO's and assume they serve the same purpose. They usually are for totally different situations. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 17:51:00 - [ 46]
ok, but if someone is paying divs, and those divs are no where near what the interest on a loan would be << that's the comparison i'm leaning towards in the above post.
they wouldn't have been able to pay a loan back.
if you can't make YY% profit at a certain point of billions; then you boasting that you control so many billions of investor isk is rather hollow. you control all that isk, yet you're turning out pathetic profits/divs.
but, we investors, seem to accept that.
people flock by the herds to invest in a 5-7% div giving venture. some of these are a flat guaranteed return (which means it's a low interest unsecured loan, in essence, correct?), some may actually say, we have a guaranteed minimum.
isso would report more than the 5% minimum "profit" each month; investors just never saw more than 5% because of, well probably a lot of the reasons in that 8 page thread.
if you compare the interest rate of a loan, to the divs being given by these public ventures -- HOW wanting are the divs by comparison? how many of those corporations actually turn enough profit TO have been paying on loans?
people building reps is all fine and dandy, but if your rep is that you generate enough profit to have not even paid a loan for the amount of your ipo -- what kind of rep is that really? a captain of the market would be generating (or striving to generate) stellar returns so that everyone goes "damn, i should buy into that venture"; yet, what i see a lot of is "i have a venture that has XYZ billions of investor iskies - i'm really trusted".
i'd much rather be investing in a captain of the market, who was setting new records and making him/her-self a fortune, along with all the investors.
settling for less is, well, settling for less. sort of like someone conquering a bunch of regions in space, to only hand them over to another group of pilots, rather than fight to defend them -- it's settling for less. |
Shadarle |
Posted - 2007.11.04 18:06:00 - [ 47]
You just aren't really thinking things out fully.
If people only offered ventures that were above 10% (the going loan rate as far as I know) then you'd see over 10 times less shares offered.
So basically as investors we could refuse to settle for less than 10%. We could then invest in say 100 billion isk worth of shares that actually return that.
The other option is to accept lower returns and then get to invest in say 1 trillion isk worth of shares.
This is all about supply and demand. Currently the supply/demand curve fluctuates around the 5-8% mark. There are more people wanting to invest money then there are people asking for that money. Because of this there is no reason to offer a higher dividend. People would rather get 5-7% on 10 billion isk than 10% on 1 billion isk. Why? Because they obviously aren't using the money and it is just sitting idle. making 500 mill/month is better than 100 mill/month, assuming the above investment situations. |
FastLearner
Fury Holdings
Brutally Clever Empire |
Posted - 2007.11.04 18:19:00 - [ 48]
Edited by: FastLearner on 04/11/2007 18:31:47
There's a huge flaw in the argument that IPOs should pay more than an equivalent sized loan would cost. If an IPO was very confident it would be returning more than a loan would cost then, logically, the company would go and get a loan rather than start an IPO in the first place. From a purely financial perspective (ignoring the other motives for starting an IPO), IPOs are preferable than loans to a company for any of the following reasons:
1. The cost of the capital is lower than if they took out a loan (this, by definition, means that their projected dividends are lower than the cost of a loan).
2. Their intended business wouldn't generate enough profits to pay off a loan (again, this means their dividends must be lower than a loan would cost)
3. They're unable to obtain a loan due to lack of collateral and/or history.
The first two of those will always pay less than the cost of a loan. The third is where the profits (and risks) for shareholders lie.
It's also logical that the cost of loans is always likely to be higher than the top-paying (reliable) fixed rate offers available on the market. Anyone who can't see why should consider how many real life banks they know that pay out a higher rate of interest on deposits than they charge on loans. As soon as money becomes available at a rate that's below what it can accessibly return there's a huge imbalance.
I've no idea what rate EBank charges on loans: as the cost of capital to them is very low they could, in theory, offer loans well below the usual rate. The other sources of loans (Fury Bank, BMBE and, until recently, ISSO) charge rates above the 7-8% per month offered by the higher-paying large fixed rate bonds.
EDIT: Let me expand on the above slightly. Company A which is reliable and trusted offers bonds at 8%. What would happen if a lending institute then offered loans at 7%? Well, anyone who could get a loan would take one and buy bonds in company A (and the loaning institute would be better off just buying those bonds themselves and not having all the hassle of collateral etc). So, in practice, the lending institute KNOWS that they can lend an indefinite amount of cash at any rate below what the market can return. But they don't have an indefinite amount of cash to loan - so the only sensible option is to price loans above what the market can return. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 18:59:00 - [ 49]
the supply vs demand thing is a good point -- investors, on the whole, are willing to settle for a low div-returning investment. right now, it just looks like there's very few folks out there that are interested in, or perhaps capable of, making a high amount of profit. or perhaps some do, cook the books, and pocket the difference. who knows.
i know mediocrity shouldn't get very far, yet it seems to, here.
what about the 'captain of industry'? do we have any? or do we just have people who talk about how many billions of investor isk they hold? if they're not the ones making huge profits and giving stellar divs; then, they're not much in the way of a captain of industry. they're just some average schmo.
a bragging point should be how much profit you're able to generate, not how much isk you can talk people into trusting you with.
look at how many huge (billions of isk) ventures are out and about right now. look at how many generate low profits/divs, at how many just don't even generate a profit some months.
how exactly are those corps/toons penalized? will no one invest in the next venture? they probably will, because we just don't see any GREAT investments in the market.
|
northwesten
Amarr
Trinity Corporate Services
Terran United Federation |
Posted - 2007.11.04 19:10:00 - [ 50]
Edited by: northwesten on 04/11/2007 19:12:22
I really hate been dyslexic at times but let me get this straight
A bond is a loan. So I borrow like 1 bill over 5 months? but with 6% interest. so i pay 200mil with 6% on top?
An IPO is where i sell shares of 50 to make 500mil investment. SO If i go and make more than 500mil like 140mil profit will go to the shares? 140mil get split to the share and so on and so on? and if i am happy with my plans i sell more shares to increase profits?
Sorry guys i just trying to learn from the experts |
Shar Tegral |
Posted - 2007.11.04 19:11:00 - [ 51]
Originally by: Ezoran DuBlaidd
the supply vs demand thing is a good point -- investors, on the whole, are willing to settle for a low div-returning investment.Anecdotal Statement right now, it just looks like there's very few folks out there that are interested in, or perhaps capable of, making a high amount of profitAnecdotal Statement. or perhaps some do, cook the books, and pocket the difference. who knows.Flame bait
i know mediocrity shouldn't get very far, yet it seems to, here.Anecdotal Statement
what about the 'captain of industry'? do we have any? or do we just have people who talk about how many billions of investor isk they hold? if they're not the ones making huge profits and giving stellar divs; then, they're not much in the way of a captain of industry. they're just some average schmo.Flame bait
a bragging point should be how much profit you're able to generate, not how much isk you can talk people into trusting you with.
look at how many huge (billions of isk) ventures are out and about right now. look at how many generate low profits/divs, at how many just don't even generate a profit some months.Anecdotal Statement
how exactly are those corps/toons penalized? will no one invest in the next venture? they probably will, because we just don't see any GREAT investments in the market.Anecdotal Statement
A lot of words, one long troll. Do you have the capability of discussing something without being derogatory? Or, as an option, how about making statements that have some research or fact in them? More importantly >sighs< why did I forget to turn grease monkey back on? |
Shadarle |
Posted - 2007.11.04 19:21:00 - [ 52]
Originally by: Ezoran DuBlaidd
the supply vs demand thing is a good point -- investors, on the whole, are willing to settle for a low div-returning investment. right now, it just looks like there's very few folks out there that are interested in, or perhaps capable of, making a high amount of profit. or perhaps some do, cook the books, and pocket the difference. who knows.
i know mediocrity shouldn't get very far, yet it seems to, here.
what about the 'captain of industry'? do we have any? or do we just have people who talk about how many billions of investor isk they hold? if they're not the ones making huge profits and giving stellar divs; then, they're not much in the way of a captain of industry. they're just some average schmo.
a bragging point should be how much profit you're able to generate, not how much isk you can talk people into trusting you with.
look at how many huge (billions of isk) ventures are out and about right now. look at how many generate low profits/divs, at how many just don't even generate a profit some months.
how exactly are those corps/toons penalized? will no one invest in the next venture? they probably will, because we just don't see any GREAT investments in the market.
Until the supply demand issue is met then I don't see anything changing much. As to "captains of the industry", it is up to interpretation what that even means. Some could consider Hexx to be such a person even without running any IPO's himself right now. Others could consider Ricdic to be one as he is running some IPO's and is working on E-Bank which he hopes will bring the entire industry forward. Others might have considered ISSO to be one as they held more money than anyone else. Others could consider Ambo one because he delivered over 100% profit in one month to investors. FastLearner could be another as he is making 10%+ per week profit on a large sum of ISK (50+ Bil), tho he isn't paying out 10% per week obviously. Others could consider Ionia to be due to the large size of FRPB and its industry raising 7% interest. You could consider Shar or Slurm to be one for being watchdogs on new IPO's and being very harsh in order to stop potential scams. You need people to do all of these things, each is important for different reasons. I don't think you can call any one of these people to be the single captain of the industry. If you are simply concerned with percentage returns then anyone could do an absolutely insanely profitable 200 mill IPO. But that is worthless as it's such a tiny amount of ISK. Others could do 10% with 10 billion isk. Still others could do 7% with 100 billion or more. Some could do 5% with 1 trillion. So which is more impressive? To me offering 50-100% returns on a tiny amount of ISK is far less useful to the industry than offering 7% on 100 billion. I'd also say offering 50-100% returns is just stupid to do period. People are willing to invest in even somewhat risky ventures for 10-20%, so offering more is just giving away money that you could be pocketing. You seem to be thinking that everyone should agree with your personal view of what good profits are, but to others even 2-3% is better than nothing. Until you're able to look at a situation from everyone else's viewpoint you will not be able to understand why things are the way they are. |
Shadarle |
Posted - 2007.11.04 19:29:00 - [ 53]
Originally by: northwesten
Edited by: northwesten on 04/11/2007 19:12:22
I really hate been dyslexic at times but let me get this straight
A bond is a loan. So I borrow like 1 bill over 5 months? but with 6% interest. so i pay 200mil with 6% on top?
An IPO is where i sell shares of 50 to make 500mil investment. SO If i go and make more than 500mil like 140mil profit will go to the shares? 140mil get split to the share and so on and so on? and if i am happy with my plans i sell more shares to increase profits?
Sorry guys i just trying to learn from the experts
6% interest over 5 months on 1 billion isk is 300 million, not 200 million. A bond means you collect 1 billion isk from people. You then pay out 6% per month. So each month you pay 60 million isk in dividends (which gets divided among all the people who invested). At the end of 5 months you pay out the final 60 mil dividend then you pay out a 1 billion isk dividend. This is a repayment of the initial investment. A share means you collect 1 billion isk from people. You then do your best to make a profit with this money. Each month you pay out a percentage of the profit you made. This percentage can vary depending on your plan, but generally you pay out 50-75% of it and keep 25-50% as personal profit. Lets say it is a 50/50 split. If you made 100 million isk the first month you would pay out 50 million isk as a dividend which is split between investors and you send your main 50 million isk. The next month if you make 300 million isk you would pay out 150 million isk in dividends and send 150 million to your main. These are very basic examples and generally things get a bit more complicated. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 19:49:00 - [ 54]
Edited by: Ezoran DuBlaidd on 04/11/2007 20:14:08Edited by: Ezoran DuBlaidd on 04/11/2007 20:03:01 Originally by: Shar Tegral
Originally by: Ezoran DuBlaidd
the supply vs demand thing is a good point -- investors, on the whole, are willing to settle for a low div-returning investment.Anecdotal Statement right now, it just looks like there's very few folks out there that are interested in, or perhaps capable of, making a high amount of profitAnecdotal Statement. or perhaps some do, cook the books, and pocket the difference. who knows.Flame bait
i know mediocrity shouldn't get very far, yet it seems to, here.Anecdotal Statement
what about the 'captain of industry'? do we have any? or do we just have people who talk about how many billions of investor isk they hold? if they're not the ones making huge profits and giving stellar divs; then, they're not much in the way of a captain of industry. they're just some average schmo.Flame bait
a bragging point should be how much profit you're able to generate, not how much isk you can talk people into trusting you with.
look at how many huge (billions of isk) ventures are out and about right now. look at how many generate low profits/divs, at how many just don't even generate a profit some months.Anecdotal Statement
how exactly are those corps/toons penalized? will no one invest in the next venture? they probably will, because we just don't see any GREAT investments in the market.Anecdotal Statement
A lot of words, one long troll. Do you have the capability of discussing something without being derogatory? Or, as an option, how about making statements that have some research or fact in them? More importantly >sighs< why did I forget to turn grease monkey back on?
another post from another person high up in ebank in yet another thread, which contributed absolutely nothing and was just a whiny ***** troll. kudos to ebank. to someone that actually posted something other than ******ed ebank director-level whining -- i understand that some people have 100s of billions of isk laying around, and collecting 1% on that amount is better than nothing. i do understand that. proton power's venture - how large was it? as in, how many billions did it involve? wasn't he in the 15%+ range for divs? great divs are not impossible. people able to generate that level of profit, on a public venture, seem to be not so abundant. i'm sure there are other examples of ventures that were more than a couple of billion isk and they were quite lucrative, PP's is the one that springs to mind. edit: i just noted that you said the below. Quote:
So which is more impressive? To me offering 50-100% returns on a tiny amount of ISK is far less useful to the industry than offering 7% on 100 billion. I'd also say offering 50-100% returns is just stupid to do period. People are willing to invest in even somewhat risky ventures for 10-20%, so offering more is just giving away money that you could be pocketing.
on a risky venture people shouldn't offer more than 10-20%. you don't see risky ventures being offered. possibly because "risky" would be taken to mean "guaranteed 10-20%" and would just cause a lot of ickiness. p.s. to shar (tegral) - normally, i'd just take your post, laugh, and throw something back at you. i'm not a thin-skinned whiny ***** who can't take ****, so i have no intention of even pretending i'd report you to a mod. i replied in the fashion i did, because of your friend. |
northwesten
Amarr
Trinity Corporate Services
Terran United Federation |
Posted - 2007.11.04 19:54:00 - [ 55]
Originally by: Shadarle
Originally by: northwesten
Edited by: northwesten on 04/11/2007 19:12:22
I really hate been dyslexic at times but let me get this straight
A bond is a loan. So I borrow like 1 bill over 5 months? but with 6% interest. so i pay 200mil with 6% on top?
An IPO is where i sell shares of 50 to make 500mil investment. SO If i go and make more than 500mil like 140mil profit will go to the shares? 140mil get split to the share and so on and so on? and if i am happy with my plans i sell more shares to increase profits?
Sorry guys i just trying to learn from the experts
6% interest over 5 months on 1 billion isk is 300 million, not 200 million.
A bond means you collect 1 billion isk from people. You then pay out 6% per month. So each month you pay 60 million isk in dividends (which gets divided among all the people who invested). At the end of 5 months you pay out the final 60 mil dividend then you pay out a 1 billion isk dividend. This is a repayment of the initial investment.
A share means you collect 1 billion isk from people. You then do your best to make a profit with this money. Each month you pay out a percentage of the profit you made. This percentage can vary depending on your plan, but generally you pay out 50-75% of it and keep 25-50% as personal profit. Lets say it is a 50/50 split. If you made 100 million isk the first month you would pay out 50 million isk as a dividend which is split between investors and you send your main 50 million isk. The next month if you make 300 million isk you would pay out 150 million isk in dividends and send 150 million to your main.
These are very basic examples and generally things get a bit more complicated.
ok cool simple good! I think i go for IPO when i am ready. Thanks for explaining this. Tho another question what can make this more complicated? wages and bills etc? or keeping track on performance? /me starting to think he sould ask this in EVE New Citizens Q&A LOL I |
Shadarle |
Posted - 2007.11.04 19:55:00 - [ 56]
Originally by: Ezoran DuBlaidd
i'm sure there are other examples of ventures that were more than a couple of billion isk and they were quite lucrative, PP's is the one that springs to mind.
PP's was not a very large venture. It has kind of been hyped up since it has ended. I honestly don't remember the exact size, but it was in the range of 10-20 billion I believe. It was not a "large" IPO by any means. Paying 15% on that much money is not impossible at all. But no one has ever payed back 10% or above on any large amount of money as far as I know. And by large I mean 50+ billion. The main reason I see for it is that there is no reason to do so. If I payed out 100% profits I could return such amounts with 100+ billion, I do it for myself. But generally people who are capable of this do not need public ISK. You're starting to hit the other end of the spectrum. The people who are great at making money have no need for outside financing. Why would anyone want to pay out 15% when they could just keep it all for themselves or even pay out 10% on a loan? Or just pay out 8-9% in an IPO and still be considered to be a great IPO by our standards today? |
Shadarle |
Posted - 2007.11.04 20:01:00 - [ 57]
Originally by: northwesten
ok cool simple good! I think i go for IPO when i am ready. Thanks for explaining this.
Tho another question what can make this more complicated? wages and bills etc? or keeping track on performance?
/me starting to think he sould ask this in EVE New Citizens Q&A LOL
I
Keeping track of performance is indeed one of the most complicated things in running an IPO, at least from my perspective. Other complicated things are paying out a percentage of profits in divs, another percentage investing in the corp to increase NAV. Then you have to decide if you pay out divs based on initial investment or based on NAV. It "should" be based on NAV imo, but it is far more complicated and confusing to do so. You also have to decide if you want to offer a buyback, at what level you will offer a buyback, etc. Listing your performance and communicating properly can be complicated too. Deciding what information you want to give out, what information you can realistically give out, and what information may hurt your profit making abilities if it were to be given out. Of course there is also getting your IPO listed on the two existing EVE stock exchanges and also deciding if you can gain any benefit by working with E-bank and some new features they may offer. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 20:04:00 - [ 58]
Edited by: Ezoran DuBlaidd on 04/11/2007 20:05:49 Originally by: Shadarle
Originally by: Ezoran DuBlaidd
i'm sure there are other examples of ventures that were more than a couple of billion isk and they were quite lucrative, PP's is the one that springs to mind.
PP's was not a very large venture. It has kind of been hyped up since it has ended. I honestly don't remember the exact size, but it was in the range of 10-20 billion I believe. It was not a "large" IPO by any means.
Paying 15% on that much money is not impossible at all. But no one has ever payed back 10% or above on any large amount of money as far as I know. And by large I mean 50+ billion. The main reason I see for it is that there is no reason to do so.
If I payed out 100% profits I could return such amounts with 100+ billion, I do it for myself. But generally people who are capable of this do not need public ISK. You're starting to hit the other end of the spectrum. The people who are great at making money have no need for outside financing. Why would anyone want to pay out 15% when they could just keep it all for themselves or even pay out 10% on a loan? Or just pay out 8-9% in an IPO and still be considered to be a great IPO by our standards today?
thanks, that's what i couldn't remember, i was thinking PP's was more along the 50b mark. edit: part of your post brings us back full circle, i believe. that people who can make a lot of isk, normally will do so, and only invest their idle isk. which, if you also work with friends, that workable pool of isk, could be quite high. too bad there's not some sort of enticement to get those folks to go public with some ventures. |
Shadarle |
Posted - 2007.11.04 20:10:00 - [ 59]
Originally by: Ezoran DuBlaidd
edit: part of your post brings us back full circle, i believe. that people who can make a lot of isk, normally will do so, and only invest their idle isk. which, if you also work with friends, that workable pool of isk, could be quite high.
But people have already explained that adding more people adds more risk. Plus almost no one actually works in group to make money. I personally don't trust anyone to work with all my money. The only person I'd trust does not play EVE anymore and he wasn't a trader anyhow. Most people who make a good profit are smart enough to avoid risks and multiple people handling money is a risk. Originally by: Ezoran DuBlaidd
too bad there's not some sort of enticement to get those folks to go public with some ventures.
What possible enticement could there be for someone who makes 20% profits to turn half of them over? Other than fame of course. |
Ezoran DuBlaidd
Native Freshfood |
Posted - 2007.11.04 20:15:00 - [ 60]
Originally by: Shadarle
Originally by: Ezoran DuBlaidd
too bad there's not some sort of enticement to get those folks to go public with some ventures.
What possible enticement could there be for someone who makes 20% profits to turn half of them over? Other than fame of course.
i was hoping someone else could think of an enticement. all i've come up with is real life hookers, and i'm pretty sure that's not legal, unless maybe i move to nevada. |
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