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LarcatOfRens
Posted - 2010.04.24 16:21:00 - [1411]
 

Edited by: LarcatOfRens on 24/04/2010 16:21:00
Page 48 Sniper *****ES!!!!

I'm hitting the point where I am considering investment because of NAV.

T4U and TMPI would be my first choices of shares to buy, so +1.

Promethian child
Amarr
0utbreak
Posted - 2010.04.24 16:22:00 - [1412]
 

Yes for share creation

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2010.04.24 16:22:00 - [1413]
 

Originally by: Ji Sama
Bobby, please use my shares to vote yes.

+17000 votes for YES!

Breaker77
Gallente
Reclamation Industries
Posted - 2010.04.24 16:55:00 - [1414]
 

I vote Yarr err yes

Are you taking reservations at this time as well? If so put me down for 2 billion ISK.

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2010.04.24 17:05:00 - [1415]
 

Originally by: Breaker77
Are you taking reservations at this time as well?

First we'll let the vote pass, then I'll allow one week for existing investors to buy new shares. Then I'll open it up to everyone. No reservations.

Phoebe Halliwel
Posted - 2010.04.24 17:09:00 - [1416]
 

Please use my shares to vote yes.

If you are able to source BPCs for resale, is it worth creating some reserve within the IPO for trade opportunities?

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2010.04.24 17:12:00 - [1417]
 

Originally by: Phoebe Halliwel
Please use my shares to vote yes.

+2800 votes for YES!

Kelltick
Interstellar KnuckleDraggers LLC
Posted - 2010.04.24 17:33:00 - [1418]
 

Although they aren't many, my shares vote yes as well.

Rhivre
Caldari
TarNec
Posted - 2010.04.24 18:02:00 - [1419]
 

Yes from my shares too

Hel O'Ween
Men On A Mission
EVE Trade Consortium
Posted - 2010.04.24 19:16:00 - [1420]
 

Not that many, but +500 for "Yes"

Emmgel
Posted - 2010.04.24 20:14:00 - [1421]
 

20,000 votes cast in favour of creation of shares.

Emmgel

Gulnack
Minmatar
Posted - 2010.04.24 20:23:00 - [1422]
 

It appears as though the new issue will be hot. Perhaps the new shares should be offered at a premium?

/ramble on
If I'm doing this right, an additional 70,000 shares will dilute the existing 204,000 shares by about 34%. Bad Bobby has stated that existing shareholders will have first rights of refusal. If we were to maintain the ownership proportions then each shareholder would be entitled to purchase 1 new issue share for every 3 shares outstanding, give or take. I'm going to assume that this is off the table, logistics would be a headache. It will most likely be a free for all among the existing shareholders.

By offering the new shares at a premium additional investment capitol could be raised for future endeavors, a special dividend or we could reduce the size of the offering leaving any left over shares in the treasury. Just wondering what others think.

Krathos Morpheus
Legion Infernal
Posted - 2010.04.24 22:00:00 - [1423]
 

Originally by: Gulnack
It appears as though the new issue will be hot. Perhaps the new shares should be offered at a premium?

/ramble on
If I'm doing this right, an additional 70,000 shares will dilute the existing 204,000 shares by about 34%. Bad Bobby has stated that existing shareholders will have first rights of refusal. If we were to maintain the ownership proportions then each shareholder would be entitled to purchase 1 new issue share for every 3 shares outstanding, give or take. I'm going to assume that this is off the table, logistics would be a headache. It will most likely be a free for all among the existing shareholders.

By offering the new shares at a premium additional investment capitol could be raised for future endeavors, a special dividend or we could reduce the size of the offering leaving any left over shares in the treasury. Just wondering what others think.
I have no vote since I hold no shares in T4U, but unless you have something to do with the money, charging more money just to have more money is stupid. You have a need for money and then you raise what you need for the business, but having idle money is pointless.

Kiree Chancel
Phantom Squad
Posted - 2010.04.24 23:56:00 - [1424]
 

Voted 'yes' in-game for shares creation. As a very minor shareholder I would be absolutely willing to invest more at this point.

Gulnack
Minmatar
Posted - 2010.04.25 01:12:00 - [1425]
 

Originally by: Krathos Morpheus
Originally by: Gulnack
It appears as though the new issue will be hot. Perhaps the new shares should be offered at a premium?

/ramble on
If I'm doing this right, an additional 70,000 shares will dilute the existing 204,000 shares by about 34%. Bad Bobby has stated that existing shareholders will have first rights of refusal. If we were to maintain the ownership proportions then each shareholder would be entitled to purchase 1 new issue share for every 3 shares outstanding, give or take. I'm going to assume that this is off the table, logistics would be a headache. It will most likely be a free for all among the existing shareholders.

By offering the new shares at a premium additional investment capitol could be raised for future endeavors, a special dividend or we could reduce the size of the offering leaving any left over shares in the treasury. Just wondering what others think.
I have no vote since I hold no shares in T4U, but unless you have something to do with the money, charging more money just to have more money is stupid. You have a need for money and then you raise what you need for the business, but having idle money is pointless.


Is diluting shareholder value with secondary issues sold below market value less stupid?

I might have been too vague, so I'll start from the beginning. I think expansion through further acquisition is a great idea and for what it's worth as an un-wealthy and very minor investor I voted yes. A vote to fund the investment with an issue of an additional 70,000 shares has already been proposed and support seems overwhelming. So lets assume that the creation of an additional 70,000 shares is a forgone conclusion.

Many investors from the first four rounds (myself included) are eager to buy more shares and I believe that their is a strong interest from the rest of the community as well, so it stands to reason that the existing shares are worth more than 1mm each. Just how much they are worth is hard to judge since their is no active market. However, I feel reasonably certain that I could sell my shares for 1.25mm, maybe as much as 2mm now that a fairly consistent revenue stream has started, the Titan market has stabilized and demand seems strong. So why then would I want the value of my existing shares reduced (through dilution) so that additional shares can be sold below the fair market value?

I don't, but their are alternatives. I could wait until the new issue, and as an existing shareholder, scoff up as many shares as my meager budget allows and then sell some/all of those shares back into the market while interest is still at a fevered pitch... then maybe come back into the market in a few months when things cool off and try to buy back the sold shares at more reasonable prices.

Or... as a community the existing T4U shareholders/BOD/Bad Bobby himself can attempt to set the new issue at a fair price that will avoid market volatility. Bad Bobby has forcast dividends of 2-2.5%, splitting the difference lets call it 2.25% of face value. Thats 2.25% after months without any returns all while enduring the risk of possible failure as the Titan market wobbled. If the new shares were sold at 1.5mm, then the new investors would see an ROI of 1.5% with a fraction of the risk. The premium on new shares would also help to balance supply with demand at issue.

This raises the question of what to do with the extra capitol? We could reduce the offering from 70,000 shares to 47,000 (further supporting the 1.5mm price and leaving 23,000 shares in the corp treasury), or sell all the shares and save the extra 35bn for future investment or distribute the extra 35bn as a special dividend.

Pierced Brosmen
Priory Of The Lemon
Posted - 2010.04.25 02:12:00 - [1426]
 

Voted yes for creation of shares.

I'm positive to putting isk down for another 1000-2000 shares in this expansion

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2010.04.25 02:28:00 - [1427]
 

Originally by: Gulnack
...


Your numbers are way off, but the basic idea is sound. People will pay a premium on the face value to buy into a successful company.

Krathos Morpheus
Legion Infernal
Posted - 2010.04.25 03:41:00 - [1428]
 

Originally by: Gulnack
Is diluting shareholder value with secondary issues sold below market value less stupid?
Of course that concept is not stupid, what is stupid in my eyes are the 'solutions' you propose.
Increasing the capital when not needed is not clever indeed. If you are not going to make use of the money you're better not getting it from other people. This is what I understood and criticized from your first post.

If you could increase the value of all shares, you should remember that T4U already offers very low dividends, maybe you can drop a bunch of shares at a premium on a few losers, but effectively increasing the value of all shares will make it dificult for shareholders to get rid of their shares in the future.
And you can't increase the value of all shares without putting idle cash in the company and making new shares lose part of their value (see the last point) the very second they are purchased and fixing their value to an odd number more dificult to market when selling later.

Lastly, regarding the 'extra dividends' for current shareholders I'd say that if you think you can sell your shares for a 100% premium you should sell them right now given that the return that T4U offers equals more than three years of dividends on that deal.
An increase of 25% equals almost one year of dividends and I can't imagine anyone half intelligent taking that offer either, given the time it would take to even the cost of oportunity.

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2010.04.25 04:34:00 - [1429]
 

As existing shareholders are being given 1 week to buy shares before new shareholders, the simple way to achieve what Gulnack suggests is to simply buy up and then re-sell the shares at a premium. That way the extra isk goes directly into existing shareholder's pockets, where it belongs, rather than into T4U's coffers.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2010.04.25 05:06:00 - [1430]
 

Edited by: SetrakDark on 25/04/2010 22:38:38
Ya, upon further reflection it's not a good idea. You would have to sell them all at a premium and cancel the current shareholder window for it to work. The way Bobby describes privileges the rich, but that's the advantage of being rich.


Gulnack
Minmatar
Posted - 2010.04.25 06:41:00 - [1431]
 

Originally by: SetrakDark
Your numbers are way off, but the basic idea is sound. People will pay a premium on the face value to buy into a successful company.


After speaking very briefly with SetraDark it appears that my valuations were way off. As a relatively new MD participant I may be missing something unique to Eve. SetrakDark points out that all of the shares must have the same face value, which Krathos also touches on indirectly, but that new participants might be charged a small premium to the set face value. I'm not sure that I understand the why of this. The par value is arbitrary. The worth is what someone will pay for it which in turn determines the ROI. No? I have been viewing the T4U shares as a passive income stream with an ownership interest in a corporation. When I want my investment back I sell off my shares at whatever the market will bear. However, it seems as though the shares are treated more like callable bonds... this is perhaps because the short life cycle of virtual companies keeps valuations close to book value?

Originally by: Krathos
Increasing the capital when not needed is not clever indeed. If you are not going to make use of the money you're better not getting it from other people.


None of the solutions suggest not using the money. One option improves the quick ratio, another reduces the size of the issue and the third rewards the existing shareholders who have taken on more risk from day one. All three help to balance supply with demand.

Originally by: Krathos
If you could increase the value of all shares...


I don't have to, existing holders are already chomping at the bit to increase their positions. If their was a real market for these "shares" then I'm willing to wager that their would be a premium. When it comes time to unload you should sell your interest for whatever the market will bear, weather the number is round or "square". Even if you don't move the face value, at a premium of 100k the shares will yield 1.61% over 18 months.

Originally by: Krathos
Lastly, regarding the 'extra dividends' for current shareholders I'd say that if you think you can sell your shares for a 100% premium you should sell them right now given that the return that T4U offers equals more than three years of dividends on that deal.
An increase of 25% equals almost one year of dividends and I can't imagine anyone half intelligent taking that offer either, given the time it would take to even the cost of oportunity.


Huh? Excluding special dividends, If you had a bond paying a 2.25% monthly coupon it would take about 23 months to break even on a 25% premium... A 100% premium would take much much longer. However, a share in a company experiences growth in addition to paying dividends... the growth is what your paying for but if you cut the pie into more pieces, the pieces grow smaller instead of larger. Anyway these aren't really shares so, my bad. You're right, the premiums were way out of line.

However, the three solutions are still very much viable...

Gulnack
Minmatar
Posted - 2010.04.25 06:47:00 - [1432]
 

Originally by: SetrakDark
Ya, upon further reflection it's not a good idea. You would have to sell them all at a premium and cancel the current shareholder window for it to work. The way Bobby describes privileges the rich, but that's the advantage of being rich.

Also, wtb 1 T4U share so I can buy and resell half the new offer. Razz


lolz - sold, will arrange tomorrow or transfer in good faith.

SetrakDark
DarkCorp Citizens Holdings
DarkCorp Citizens
Posted - 2010.04.25 06:59:00 - [1433]
 

Edited by: SetrakDark on 25/04/2010 14:57:37
Originally by: Gulnack
The par value is arbitrary. The worth is what someone will pay for it which in turn determines the ROI. No? I have been viewing the T4U shares as a passive income stream with an ownership interest in a corporation. When I want my investment back I sell off my shares at whatever the market will bear. However, it seems as though the shares are treated more like callable bonds... this is perhaps because the short life cycle of virtual companies keeps valuations close to book value?


You are absolutely correct in your questions and conclusion. There is a reasonably foreseeable end to this venture, when the shares will be redeemable for a unit worth of assets.

What you're describing could work, but, as I mentioned above, would require a completely open sale. This kind of equity expansion may be possible, but it would be risky without solid secondary market institutions like widely used exchanges and underwriters. What Bobby is suggesting instead is that current investors are given the opportunity to act as underwriters and reap the reward.

Long story short, you're right, but I don't know if the secondary market is sophisticated enough to handle it.

This is pretty theoretical stuff, so if you're unsatisfied with the answer by all means say so. I love discussing this crap.

Edit: Upon further consideration, I realize what was wrong with your suggestion. An equity expansion in real-life would be for a target amount of money, in this case 70b, and would be based on the market value of the shares. It was the premium and special dividend ideas that were wrong.

This is where a vibrant equity exchange and investment bank (underwriters) would come in. The investment bank would use the market information to estimate the number of shares needed at post-expansion market price (plus their premium) to raise 70b. They would then buy all the new shares for 70b, then sell them on the market at a premium. The advantage to existing shareholders is that they are able to bring in assets which will have a greater value than their cost in share dilution.

Without the equity market to help price and distribute the shares as well as the technical expertise and risk-shouldering of the investment bank, the company would shoulder all the risk of overpricing shares and falling short of the 70b, when they should be concentrating on their core business.

We do have an equity exchange, but there just aren't enough companies to justify an investment bank, and the exchange is also underused because of a lack of public companies. However investment banks are probably the next phase of advanced market institutions, if the number of public companies does grow, and they actually make economic sense in Eve, unlike this bastardized deposit model people keep trying.


Hanster Maluki
Posted - 2010.04.25 08:38:00 - [1434]
 

+4000 for yes

Titans 4U
Titans For You
Posted - 2010.04.25 20:04:00 - [1435]
 

The vote completed with 99.8% support for creating 70000 new shares.

Existing shareholders have one week to buy shares before they are made available to the general public.

Shares are 1m per share (as before). The minimum purchase is 500 shares (500m).

The process is:

1. Post in this thread stating the number of shares you wish to purhase.
2. I post to accept your purchase, thus confirming that you are an existing shareholder and eligable to make the purchase.
3. You send me the isk.
4. I send you the shares.

eXistentiA
Amarr
Posted - 2010.04.25 20:07:00 - [1436]
 

wtb 1000 shares

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2010.04.25 20:08:00 - [1437]
 

I am buying 10000 shares.

Companion Qube
Minmatar
Electron Conservation Inc
SRS.
Posted - 2010.04.25 20:09:00 - [1438]
 

I'll take 4,000 shares

Emmgel
Posted - 2010.04.25 20:10:00 - [1439]
 

Edited by: Emmgel on 25/04/2010 20:16:28
7,500 shares purchased from the new batch.

Emmgel

Kithran
Posted - 2010.04.25 20:11:00 - [1440]
 

Can I buy 1400 shares

Cheers

Kithran


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