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blankseplocked [BOND] Freighter Factory, 2bn, 2mths, 3% secured / 5% unsecured (FULL)
 
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Tekota
The Freighter Factory
Posted - 2011.08.10 08:35:00 - [1]
 

Edited by: Tekota on 06/09/2011 11:39:51
Edited by: Tekota on 15/08/2011 20:05:13

EDIT: In the event that these forums are set to read only during the life of this bond, the continuation thread can be found at: https://forums.eveonline.com/default.aspx?g=posts&t=6388

Freighter Factory Finance Facilitation




tl;dr


2bn isk liquidity bond, 2 months, 1.3bn at 3% secured and 700m at 5% unsecured.


Preamble


When I started Eve my end goal was capital production. As experience grew I realised this would mean freighter production as Eve PVP leaves me cold and PVP in a freighter full of minerals in lowsec would leave me cold and alone in my pod. As experience grew further I realised that freighter production was a terrible end goal as the isk per slot per day is abysmal. And as experience grew even further I realised that freighter production, whilst pretty terrible for isk, is pretty damn great for low maintenance income - every 11 days just load up the lines and fly product to market.


The Business


So that's where I'm at now; after considerable planning and spreadsheet-fu, last month I left (with great sadness) a truly fantastic corp to set up The Freighter Factory. Public contract history and Sell Order forum posts will show that I bought a Fenrir print, two cargo bay prints, and one each of cap construction, armor plates and propulsion. The first Fenrir rolled off the lines last week, next one is due out in five days time and they keep on coming every 11 & 2/3 days thereafter.

Margins vary due to an effective 20 day delay between minerals going in and the freighter built with them coming out, however we're looking at about 15-20% profit resulting in around 100-140m gained per freighter (for Fenrir & Prov, Charon & Obelisk slightly worse).

So, worst case producing one freighter every 11 2/3 days results in 300m profit per 35 days.

So I have bought a Providence BPO, this coupled with the two cargo bay prints allows me to churn out two freighters every 11 2/3 days.

Producing two freighters every 11 2/3 days would result in worst case 600m profit per 35 days.

The recent providence print purchase, coupled with doubling my mineral tie-up has however left me a little short on liquid capital which is why I'm now coming to MD to try to secure 2bn for two months.


The Offering


Last night I contracted researched T1 sub-cap ship BPOs to Raw23 to an NPC value of 1.3bn isk. There will be two tranches open to investors:
  • 1.3bn at a rate of 3% per calendar month for two months fully secured by collateral to be liquidated by Raw23 in the event of my scam / bus accident / total business failure.

  • 700m at a rate of 5% per calendar month for two months unsecured. Read on for my attempt to allay fears of scam and mitigate the risks of total business failure. Bus accidents I can't help you with.

Interest will be paid one calendar month after bond start and interest + principal will be paid two calendar months after bond start.
Minimum investment of 100m (apologies but lower amounts than this could become hard to keep track of).



(continued below, please let me get next couple posts reserved for more wall-o-text)...

Tekota
The Freighter Factory
Posted - 2011.08.10 08:36:00 - [2]
 

Risks to the business


The mineral basket tends to iron out extremes in individual mineral fluctuations (it would be rare for the basket to change 10% in either direction over the course of a 20 day production). Freighters are very trit heavy however and could be vulnerable to severe changes in trit price resulting in freighters coming off lines which cost significantly more to make than current mineral prices would typically indicate. The good news would be that all other producers are in a similar boat so the recourse would be to just 0.01 hard and ensure my lines get sold before taking advantage of low trit prices for the next runs.

It's possible that the bottom could compeletely fall out of the freighter market. Perhaps some super nerf or vast over saturation. In this instance I'd liquidate my stock and prints and close out the bond - I can't imagine a situation where that wouldn't cover 2bn, and if it did struggle then the liquidation would surely cover the 700m unsecured investors with the collateral held by Raw23 covering the 1.3bn tranch.

War declarations: Tekota will drop into an NPC corp and continue happily. The Freighter Factory is a lovely name under which to run my operations but it serves no practical purpose at present, no POSes, not even any offices.

War that I forget about and undock from Jita straight into a station camp: I've learnt that lesson once, won't need to learn it again :o)

Suicide ganking: I will ensure my cargo value (minerals) to EHP ratio remains at levels which would make a suicide gank unprofitable. Ganking for lulz is harder to guard against but experience has given a modicum of knowledge of warning signs.


Full disclosure of alts


Folks, particularly those considering the unsecured tranch, will want to know who they're dealing with and whether I can do what I say I can. So, main is Tekota - I've opened up eve board so you can see the scattergun approach of a main who's easily distracted by shiny "explosions have 5% more sparkle" skills before settling into industry. Alt 1 is Tekoto - corp holder and tends to get used as a hub price checker, will be trained into mirroring Tekota's science and industry skills and operations at some point. Alt 2 is Tekotu - this one I'll admit keeps getting remade. Sometimes it's just messing around with the character creation, sometimes I think "ooh, I'll make combat alt", or another science and industry or I don't know. It will probably end up as a pvp alt at some point if something ever snaps and I decide I actually like eve pvp. Previous names on this slot have been Tradicus Alticus and Rockets o'Leary.

That's it, one account. There was a second account. Long ago I somehow got it in my head that mining would be fun, Tekota got trained into Exhumers and a second account was created with "Tekasta" as a maxed out Orca pilot. Just about the time skill training completed I realised I couldn't stand mining so let the account lapse some time ago. I honestly can't remember the other slots, I think I used one as a scout during a war dec but don't recall the name, the third slot I think remained empty.



(continued below, just one more post to come)

Tekota
The Freighter Factory
Posted - 2011.08.10 08:37:00 - [3]
 

Odds and Ends


Early exits: I'd really rather folks stick for the full two months, as noted there is a 20 day ramp up period when starting a new line so investors exiting at one month could make things a bit tricky. However if your circumstances change and you find the need to exit early then drop me a line and we'll figure something out.

Raw23 scam: In the frankly highly unlikely event of Raw23 seeing my 1.3bn of prints in his posession and deciding to scam then he's scammed me not the investors in this bond. It would not affect my ability or my intention (which, for the record is absolute) to pay back my investors. Raw's current public liabilities are his choice to publically disclose but if what he informed me in private is correct I believe him) then the chance of him bailing is neglible in my mind.

Audit: Customisable API and I'm completely open to it, mail is the only thing I'm a bit icky about. No, not that there's anything juicy in there, just that it's, well it's my mail. Any concerns this raises please do holler and I'll do my best to address them; if it ends up being a dead set requirement then we'll cross that bridge.

Interest rates: Bit on the low side I know. As noted above my profit on this venture is really quite bad and as such I can't offer particularly good rates. If I was offering 15% having found a super-sekret isk fountain then, well then it'd be a bit suspicious.

Scammers as investors: Known scammers, please don't invest. I reserve the right to refuse investment but once I accept an investment it will get paid along with everyone else regardless of what comes to light in the interim. I'd rather not have scammers invest as it raises moral arguments but I'm not going to scam a scammer even if my best friend's sister's boyfriend's brother's girlfriend hears from this kid who knows the guy who's going with the girl who saw them sell a lump of Carbon rather than a Charon.

Expansions: This bond will be fully closed out as described. There may be another offering down the line as I can squeeze a third freighter into production with an extra cargo bay, construction parts and freighter print but that will be significantly later and if I would naturally prefer to avoid a bond if possible. No rollovers, no sneaky expansions.

Gaps in posting/contract history: From time to time Eve has burnt me out a little and I've taken breaks. I'm fully plexed up for the duration of this bond and part of the reason for moving into lower maintenance (albeit at lower profits) production is to achieve a lower impact eve experience.

Why not sell the collateral: Aside from an irrational sentimental attachment to blueprints they will continue to have use after this bond closes in filling little gaps in slot utilisation if I desire a spot of faster paced (and higher profit) production. Re-acquiring them at similar research levels could take time.


Finally


Naturally wait for Raw23 to confirm collateral - I've rushed the poor guy a bit and at time of writing he hasn't had a chance to pick up the contract. Any questions ask away. All being well I'd like to get this running by the end of the weekend, I'll put up reservations in the post below and once (if) reservations fill I'll ask folks to send isk.



(sorry, I will need just one more post below this for reservations, that'll be the last one I promise)...

Tekota
The Freighter Factory
Posted - 2011.08.10 08:38:00 - [4]
 

Edited by: Tekota on 15/08/2011 20:05:57
Edited by: Tekota on 15/08/2011 17:57:45
Edited by: Tekota on 10/08/2011 14:37:42
Edited by: Tekota on 10/08/2011 10:04:27

Reservations



Collateral holding now confirmed by Raw, feel free to send isk at your convenience, bond will begin when funds received.
Levija Saplina - 1.3bn secured
Levija Saplina - 700m unsecured
Flakeys - 1.3bn secured
Flakeys - 700m unsecured


(the end, many thanks for patience)

Jerry Pepridge
Posted - 2011.08.10 09:25:00 - [5]
 

would like pledge 20b

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 09:29:00 - [6]
 

Edited by: Atima on 10/08/2011 09:30:42
This sounds familiar

I can also add that I can pledge 90 capital buildslots for the upcoming expansion for a nominal fee.

Tekota
The Freighter Factory
Posted - 2011.08.10 09:44:00 - [7]
 

Originally by: Jerry Pepridge
would like pledge 20b


I did fall for a Misty post a while back so I guess I deserved that one Very Happy

Originally by: Atima
This sounds familiar

I can also add that I can pledge 90 capital buildslots for the upcoming expansion for a nominal fee.



I'm going to have a hard time proving a negative but as an attempt all I can say is as already buried in the wall above that there will be no expansion / rollover etc. I have plans for future, sure, next step will be to add a third freighter run on Tekota which will require 1 more freighter print, 1 more cap construction print and 1 more cargo bay print. That'll result in Tekota's 10 manufacturing slots being largely utilised (think I worked out 82% total utilisation a while back). That'll obviously take some time to set up and be likely way into the future.

Next step after that would be to basically replicate the science and industry slots on Tekoto - as seen from the skill board link above he's going to need some serious (all though in fairness perhaps not that much) training to achieve and take away from my training of Tekota - and I tend to get distracted on him and think silly things like training for a Tengu or something. Anyway, that step would indeed be a significant upscale but that's something I'd probably look at operating entirely under collateral (ie sitting in a 3rd party's corp and producing from locked down prints). Either way it's a long way off and I haven't really thought about how to approach it.

Don't see a need for 90 slots for a long while :o)

Jerry Pepridge
Posted - 2011.08.10 09:45:00 - [8]
 

Originally by: Tekota
:o)


he put a 'o' in the smiley face, this guy is legit.

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 09:49:00 - [9]
 

Originally by: Tekota
Originally by: Jerry Pepridge
would like pledge 20b


I did fall for a Misty post a while back so I guess I deserved that one Very Happy

Originally by: Atima
This sounds familiar

I can also add that I can pledge 90 capital buildslots for the upcoming expansion for a nominal fee.



I'm going to have a hard time proving a negative but as an attempt all I can say is as already buried in the wall above that there will be no expansion / rollover etc. I have plans for future, sure, next step will be to add a third freighter run on Tekota which will require 1 more freighter print, 1 more cap construction print and 1 more cargo bay print. That'll result in Tekota's 10 manufacturing slots being largely utilised (think I worked out 82% total utilisation a while back). That'll obviously take some time to set up and be likely way into the future.

Next step after that would be to basically replicate the science and industry slots on Tekoto - as seen from the skill board link above he's going to need some serious (all though in fairness perhaps not that much) training to achieve and take away from my training of Tekota - and I tend to get distracted on him and think silly things like training for a Tengu or something. Anyway, that step would indeed be a significant upscale but that's something I'd probably look at operating entirely under collateral (ie sitting in a 3rd party's corp and producing from locked down prints). Either way it's a long way off and I haven't really thought about how to approach it.

Don't see a need for 90 slots for a long while :o)


You will most certainly want to expand if you have performed any form of efficiency planning on your BPO's.

Otherwise it would lead me to believe that you have not researched your business at all.

Levija Saplina
Supremacy Inc.
Not Found.
Posted - 2011.08.10 09:54:00 - [10]
 

Will take the full 2 bil bond, 1.3 bil collaterized and 0.7 bil uncol.

That's providing raw posts here to confirm he holds the collateral.

Candy Oshea
Amarr
Techfree Investment Group
Posted - 2011.08.10 09:58:00 - [11]
 

Edited by: Candy Oshea on 10/08/2011 09:58:45
Show us some firm profit margin numbers, mail is fine.

Eveboard link to your trade & Production character, would be helpful, to verify this isn't a ponzi/confidence bond.

If you claim you can make 20% per freighter, then why are you offering less then the 'normal' rates? especially if this is your first offering.

/me shrugs

edit: looks like it got filled, no need to answer my questions. best of luck.


Tekota
The Freighter Factory
Posted - 2011.08.10 10:02:00 - [12]
 

Originally by: Atima

You will most certainly want to expand if you have performed any form of efficiency planning on your BPO's.

Otherwise it would lead me to believe that you have not researched your business at all.


If you mean time efficiency then yes 3 freighter prints is my ideal per char - that means running 3 freighters & 3 cargo prints constantly, 2 cap construction prints not far off constantly and the single armor and propulsion prints running with a bit of spare capacity.

If you mean payback efficiency you could cost the above set of 3 freighters, 3 cargo, 2 cap construction, 1 armor & 1 propulsion at around 14bn. Profit of that runs to roughly 850 - 1.1b per month. So break even at lets say 15 months. That is infinitely quicker break even than say T2 BPOs.

If you mean efficiency in terms of isk per slot per hour then freighter production is terrible as I've already noted. The best I can get 10 slots running (when producing from NPC stations at least) is about 3m per slot per day. Regular T1 production will easily surpass that, I typically aimed for 10m per slot per day and generally hit that or came just under - and I'm quite sure there are many better targets I could have been producing. But as stated my aim here is not to make maximum isk per hour, my aim is to provide a very low maintenance stream and I'm accepting as the consequence of that low maintenance a low profit in return.

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 10:03:00 - [13]
 

Tell me how you calculated this 20%. Was that from base mineral cost against the freighter BPO? if so, you've failed.

You forgot to account for the cost of the component BPO's or if your buying BPC's - adding them onto the mineral costs.

I suspect this is what you have done. If you have not then 20% margins on freighters and build times which I believe are in the 5-10day range ( can't remember ) Then everyone would be building them.

Candy Oshea
Amarr
Techfree Investment Group
Posted - 2011.08.10 10:04:00 - [14]
 

Originally by: Atima
Tell me how you calculated this 20%. Was that from base mineral cost against the freighter BPO? if so, you've failed.

You forgot to account for the cost of the component BPO's or if your buying BPC's - adding them onto the mineral costs.

I suspect this is what you have done. If you have not then 20% margins on freighters and build times which I believe are in the 5-10day range ( can't remember ) Then everyone would be building them.


is what i was trying to get at in a nicer way Embarassed

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 10:07:00 - [15]
 

Originally by: Tekota
Originally by: Atima

You will most certainly want to expand if you have performed any form of efficiency planning on your BPO's.

Otherwise it would lead me to believe that you have not researched your business at all.


If you mean time efficiency then yes 3 freighter prints is my ideal per char - that means running 3 freighters & 3 cargo prints constantly, 2 cap construction prints not far off constantly and the single armor and propulsion prints running with a bit of spare capacity.

If you mean payback efficiency you could cost the above set of 3 freighters, 3 cargo, 2 cap construction, 1 armor & 1 propulsion at around 14bn. Profit of that runs to roughly 850 - 1.1b per month. So break even at lets say 15 months. That is infinitely quicker break even than say T2 BPOs.

If you mean efficiency in terms of isk per slot per hour then freighter production is terrible as I've already noted. The best I can get 10 slots running (when producing from NPC stations at least) is about 3m per slot per day. Regular T1 production will easily surpass that, I typically aimed for 10m per slot per day and generally hit that or came just under - and I'm quite sure there are many better targets I could have been producing. But as stated my aim here is not to make maximum isk per hour, my aim is to provide a very low maintenance stream and I'm accepting as the consequence of that low maintenance a low profit in return.


I was refering to time efficiency of BPO usage. On carriers this required aprox 50 prints in production to provide 90%+ efficiency.

Maximising BPO efficiency in capital construction is an important factor to your rate of return in my experience.

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 10:13:00 - [16]
 

Originally by: Candy Oshea
Originally by: Atima
Tell me how you calculated this 20%. Was that from base mineral cost against the freighter BPO? if so, you've failed.

You forgot to account for the cost of the component BPO's or if your buying BPC's - adding them onto the mineral costs.

I suspect this is what you have done. If you have not then 20% margins on freighters and build times which I believe are in the 5-10day range ( can't remember ) Then everyone would be building them.


is what i was trying to get at in a nicer way Embarassed


Baptism by fire and all that. I made similar mistakes to this guy when I first started up. It resulted in me going MIA and providing the opportunity ( and temptation ) for a significant scam from a then near unknown character.


Tekota
The Freighter Factory
Posted - 2011.08.10 10:19:00 - [17]
 

Ok example from my last run:
Fenrir at ME3 requires:
12 armor plates
77 cargo bays
45 construction parts
26 propulsion

Using ME100 cargo prints (and yes I'm using BPOs not BPCs, it does say it up there in the wall), ME100 construction, ME100 armor and ME60 propulsion requires the following:
iso 689,496
mega 11,688
mex 4,689,756
nocx 203,833
pye 12,596,188
trit 92,256,251
zyd 31,579

Using prices which were at the time of purchase set to Jita sell order prices of:
Isogen $62.90
Megacyte $2,647.94
Mexallon $28.03
Nocxium $384.00
Pyerite $4.35
Tritanium $3.45
Zydrine $739.89

This comes to a total of 680,486,623.86 buy price of minerals.

At the time of sale I achieved 837m for that Fenrir. Of that broker fees were 4,854,600.00 and sales tax was 4,185,000.00.

837,000,000 - (680,486,623.86 + 4,854,600.00 + 4,185,000.00) = profit of 147,473,776.14 which equates to 21.39% profit.

Now as I've said above, whilst that sounds great, I mean 20% profit on anything manufactured is *amazing* - however that doesn't tell the whole story, isk per slot per day is the important thing and once you consider the opportunity cost lost in slots churning out components freighter production becomes a very poor isk earner BUT a very low maintenance one.

And Candy, eve-board links to main and alts are already embedded in above "full disclosure of alts" section.





Atima
Minmatar
House of Marbles
Posted - 2011.08.10 10:23:00 - [18]
 

Use that figure to calculate your rate of return against the cost of the blueprints for 1 month.

Tekota
The Freighter Factory
Posted - 2011.08.10 10:24:00 - [19]
 

Originally by: Levija Saplina
Will take the full 2 bil bond, 1.3 bil collaterized and 0.7 bil uncol.

That's providing raw posts here to confirm he holds the collateral.


Many thanks Levija, will await Raw's confirmation but can consider this full pending his stamp.

Meanwhile more than happy to carry on conversations going on above.

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 10:36:00 - [20]
 

Another thing worth doing is take data exports for the minerals and freighter prices.

Create a spreadsheet and calculate the profits over the past 6 months or so, use the avg price for minerals + freighters for each day. You can then see how the profit margin on construction of freighters changes over time. It helps prevent the mistake of a 'good day' in your initial calculation.

You could also delay the prices of freighters as there is a lag in your construction or alternatively consider your first construction run as a sunk cost ( I used this method as your always going to want a run of minerals on hand IMO ) It reduces your rate of return but not significantly as the mineral prices for 1 run is only 10-20% of the cost of blueprints.

Also when calculating your rate of return dont forget about the minerals in the cooker.

You really have to pay attention to your cashflow in capital production. There is a delay between selling your stock and purchasing your next run of materials. Dont overextend yourself or you will find yourself sitting on blueprints out of production. This is very bad because a delay in 1 blueprint is a delay in your entire production chain ( Because you maximised efficiency right?! )

Tekota
The Freighter Factory
Posted - 2011.08.10 10:44:00 - [21]
 

Originally by: Atima
Use that figure to calculate your rate of return against the cost of the blueprints for 1 month.


I may have misunderstood but I think I've already done that above. The blueprint originals are already owned, they are assets. So is the question "what is the break even point / payback time for the freighter prints + the component prints"?

If so then that is already answered above. Cost of prints so far is (EXCEEDINGLY ROUGH) 4b for both freighter prints, 2b for two cargo prints, 1.3 for the prop, 1.3 for the armor, 1.3 for the construction - call it 10b. Now with that we can churn 2 freighters every 11 2/3 days with the following slot utilisation:

1 Fenrir
2 Prov
3 Cargo
4 Cargo
5 Construction
6 Armor
7 Propulsion

A full set of component parts is completed in just under the time required to build the freighters - ie. components are built just in time for freighters in a constant loop.

Now forgive me some very rough rounding up and down, if you feel any of these are too generous please say:
Rather than this producing 2 freighters every 11 2/3 days lets round in my favour and call it six every month.
Now lets round in your favour and say I'm making 100m per freighter rather than the upper end of 147m I quoted earlier.
So I'm now making 600m per month.

10bn / 600m = 16 2/3 months payback.


Now I already knew this figure, I accept and have stated in nearly every paragraph that this is really bad isk generation but am not aiming for the get rich quick scheme, rather the make steady isk for very little input of effort (ie. three freighter loads of minerals every 11 2/3 days, fly two freighters back to market). It keeps my manufacturing lines doing something and allows me free time to do other things should I desire or just not log in at all for a couple of days should I choose that instead.

RAW23
Posted - 2011.08.10 11:00:00 - [22]
 

Confirming collateral received. In the event of default I will pay out 1.3bil isk to the investor(s).

This is a cash guarantee and not subject to sale of the collateral.

Lauren Hellfury
Full Pocket Aggro
Posted - 2011.08.10 11:02:00 - [23]
 

Originally by: Atima
Use that figure to calculate your rate of return against the cost of the blueprints for 1 month.


Can you break this down for me please as I really can't see why this would be desirable or what benefit the answer offers.

BPOs would normally be considered a capital asset and whilst technically a full ROI calculation would require that their value be included it is not something that has ever been done where the BPOs were pre-existing to the offer being issued.

If I were to follow your request of net profit as percentage of BPO costs then my average monthly return is something around the 15,000% mark. This surely can't be right.

Atima
Minmatar
House of Marbles
Posted - 2011.08.10 11:19:00 - [24]
 

Edited by: Atima on 10/08/2011 11:41:58
I'm questioning the validity of his actions as I suspect that he may struggle to make a 5% return which in turn makes this bond a loss making activity for him.


Tekota
The Freighter Factory
Posted - 2011.08.10 11:23:00 - [25]
 

Originally by: RAW23
Confirming collateral received. In the event of default I will pay out 1.3bil isk to the investor(s).

This is a cash guarantee and not subject to sale of the collateral.


Many thanks Raw, Levija feel free to send at your convenience will start bond upon receipt (won't be in game for about four hours).

Assuming start date is today I will therefore be paying on the 10th Sept 39m as 3% on 1.3b and 35m as 5% on 700m for a total of 74m.
On the 10th Oct I will be paying 74m interest once more plus 2b principal.

Incidentally I just want to clarify that the collateral is in the form of BPOs and not pure isk - don't want to be accused of that sort of sillyness.

Atima - I think I've got what you're saying in your last post, short answer is long term mineral research has been done (went fruity around Christmas with the Noctis patch mineral spike - bought a lot of freighters around that time as I realised the new ones coming off the lines would be using significantly pricier minerals) - whilst it's not been as robust as daily data exports it has been thorough. Regarding counting the locked in mineral component in payback time is a good call and one I hadn't considered, it does indeed add a couple months or so (finger in air guess, haven't worked it) to payback time. I can live with that.
And the final point re cashflow, well there you've got me, realised that one a few days ago which is precisely why this is a liquidity loan :o)

RAW23
Posted - 2011.08.10 11:23:00 - [26]
 

Edited by: RAW23 on 10/08/2011 11:24:27
Originally by: Atima
Edited by: Atima on 10/08/2011 11:19:22
I'm questioning the validity of the bond as I suspect that he may struggle to make a 5% return which in turn makes this bond a loss making activity for him.




Of the c. 10bil involved only 700mil is at 5% and 1.3bil at 3%. The other 8bil does not come with a cost so the total cost of the financing can be spread across the whole 10bil. One could argue that the last 700mil might not be worth raising given the marginal returns but this can be justified in terms of efficiency and simplicity - the lines will run more smoothly and require less maintenance with this extra isk injected than they would if they were running with less isk than is needed for the whole operation leading to inefficient stop-starting.

Tekota
The Freighter Factory
Posted - 2011.08.10 11:28:00 - [27]
 

Originally by: Atima
Edited by: Atima on 10/08/2011 11:19:22
I'm questioning the validity of the bond as I suspect that he may struggle to make a 5% return which in turn makes this bond a loss making activity for him.



On this point this liquidity loan is buffering my cashflow for a couple of months to enable me to keep that new second line running. That new second line makes (if you'll accept the admittedly rough, but I think rough with a pessemistic bias, math above) an extra 300m. Interest rates are low because of this, and will eat 74m of this for two months, giving me the time to build my own buffer.

Lauren Hellfury
Full Pocket Aggro
Posted - 2011.08.10 11:29:00 - [28]
 

Originally by: Atima
Edited by: Atima on 10/08/2011 11:19:22
I'm questioning the validity of the bond as I suspect that he may struggle to make a 5% return which in turn makes this bond a loss making activity for him.



I understand that, but how does the calculation you requested help to demonstrate this in any way? He gave a per freighter profit of circa 140m when compared with build cost. He has also given a total BPO value of circa 10b. Now, granted the profit figure is a little high and was probably the result of a favourable market at the time of purchase/sale. But 140m as a percentage of 10b (1.4%) doesn't really seem to offer anything in the way of measuring profitability.

With the offer as it stands he is liable for a little under 100m in one month and then a little under 2.1b at the end of the second month. So anything over 100m profit per month he'll keep.

I'm sorry to hijack the thread like this but I'm just trying to understand how your question/request relates to demonstrating any issues over the validity of the bond or the ability to pay based on size/interest.

RAW23
Posted - 2011.08.10 11:33:00 - [29]
 

Originally by: Tekota

Incidentally I just want to clarify that the collateral is in the form of BPOs and not pure isk - don't want to be accused of that sort of sillyness.




Confirming this. By 'cash guarantee' I meant that in the event of default I will pay out cash for the full 1.3bil immediately and keep the prints rather than raise the repayment isk by selling the prints and pay out the investors later once this has been done.

RAW23
Posted - 2011.08.10 11:37:00 - [30]
 

Edited by: RAW23 on 10/08/2011 11:38:53
On the roi question, the relevant figure for me is always total cost of BPOs plus 3-4 times the mats costs for the finished product (1 x final build, 1 x comp build, 1 x mats buy orders, 1 x finished products on sell orders, although the last two can be combined if you are efficient enough). This gives you the total cost of running the production line, against which you set the profit per unit x how ever many units will be sold per month, expressed as a percentage of the first figure.

Edit - actually the buy and sell mats can be removed if you are buying from sells and selling to buys but I typically find that the investment savings are not worth the lost profits added by the trade angle unless you are not willing to nurse the orders.


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