Calypso sale: check my math

[humanwoman]

Ok, I haven't had my morning coffee yet, but if you buy $6M shares and your maximum expected ROI is 30%, that means you get $2M per year.

Now, $6M shares entitle you to 50% planet profit, so the whole expected Calypso profit is $4M per year, right?


It's strange, who would like to sell half the planet for $6M, if it brings $4M per year?

Just wait 1.5 year and you don't have to sell anything and give away $2M every year afterwards.

 

[Joker]

Ok, I haven't had my morning coffee yet, but if you buy $6M shares and your maximum expected ROI is 30%, that means you get $2M per year.

Now, $6M shares entitle you to 50% planet profit, so the whole expected Calypso profit is $4M per year, right?


It's strange, who would like to sell half the planet for $6M, if it brings $4M per year?

Just wait 1.5 year and you don't have to sell anything and give away $2M every year afterwards.

up to 30%... could be 1%

and i know people will say... but in the past would have been this...

past performance is not a good indicator of future returns...

not to mention if everyone is selling gear and skills to buy deeds... who will cycle peds to get taxes for u

 

[Skaffen]

Just wait 1.5 year and you don't have to sell anything and give away $2M every year afterwards.

Maybe the wait is too long?

 

[Menace]

It's a "numbers on paper" thing... Why would any successful company sell "shares"?

Menace

 

[Skaffen]

Exposure

It's a "numbers on paper" thing... Why would any successful company sell "shares"?

Menace

Apparently MA are going to spend it on advertising so they can be more successful...so they can give half to the shareholders...or something.

 

[SpikeBlack]

Ok, I haven't had my morning coffee yet, but if you buy $6M shares and your maximum expected ROI is 30%, that means you get $2M per year.

Now, $6M shares entitle you to 50% planet profit, so the whole expected Calypso profit is $4M per year, right?


It's strange, who would like to sell half the planet for $6M, if it brings $4M per year?

Just wait 1.5 year and you don't have to sell anything and give away $2M every year afterwards.

it's 25% of the total, 50% goes straight to MA, 25% to Calypso and then 25% to the deed holders. Which I still don't get, surely it should be 50% to MA, then runnings costs are taken out of the remaining 50% and then whats left gets split between further investment and the deed holders.

By your initial calculations and correcting for the 25%, Calpso will need to bring in $8M per year for you to get $2M. However I'm guessing that MA are banking on very few people ever having enough shares to make withdrawls possible and that they'll also spend it in game. That way they never have to back it up with cash, just numbers in a database.

If they were real shares then they'd have to pay dividends in cash, doing it this way avoids that. Plus it leaves all the real voting rights for the board in the hands of the current owners. The players have no real say, so no voting Jan off the board again. Having real shares would allow any share owner to attend the AGM if they want to and there would be nothing they could do to stop them.

They can spend all the cash they get in this sale on their marketing campaign but in the end they need these new players to stay and deposit. Personally with how EU is being currently being run I don't believe it's possible.

And there's nothing stopping them from selling Calypso still if someone wanted to buy it.

 

[humanwoman]

it's 25% of the total, 50% goes straight to MA, 25% to Calypso and then 25% to the deed holders. Which I still don't get, surely it should be 50% to MA, then runnings costs are taken out of the remaining 50% and then whats left gets split between further investment and the deed holders.

By your initial calculations and correcting for the 25%, Calpso will need to bring in $8M per year for you to get $2M.

This makes even less sense to me. You have a planet that brings you $8M per year, and you sell a quarter of it for $6M?

That's your profit for 9 months, why sell, what's the rush? Unless your business will not survive for another 9 months, which I believe is not the case.

And after all these years any adv campaign could really wait a bit, I don't believe MA suddenly is so desperate to advertise.

 

[XeroX2]

Well obviously MA expects to be able to increase the revenue so much utilizing the 6m$ that it will be worth more than 25% of Calypsos current revenue. Personaly I think this is very very much possible if they put a good junk of money into advertising which is badly needed for EU to do well. So yeah selling a part of Calypso to the current players to be able to attract new players seems like a good idea to me.

 

[Bones]

People with a vested interest are less likely to leave.

Share holders are most likely to put their dividends right back into the game.

Word of mouth is the best advertisement , good or bad , but those that hold a stake in the product would be fools to give a bad advertisement to their own business.

Anyone have anymore?

Bones

 

[humanwoman]

@Bones and XeroX2: So the less shares they sell (and I think there is no way they sell all $6M) the less they will cost in the future?

 

[Xavier Target]

This makes even less sense to me. You have a planet that brings you $8M per year, and you sell a quarter of it for $6M?

That's your profit for 9 months, why sell, what's the rush? Unless your business will not survive for another 9 months, which I believe is not the case.

And after all these years any adv campaign could really wait a bit, I don't believe MA suddenly is so desperate to advertise.

Go read mindark's latest financial report. They are still losing money this year, just not as fast as last year, so yes they do need a cash infusion to have sufficient funds to both continue to invest in the platform and absorb the ongoing losses.

 

[Bones]

@Bones and XeroX2: So the less shares they sell (and I think there is no way they sell all $6M) the less they will cost in the future?

No .. all shares sold by MA for this particular venture are listed at 1k a deed.

Sorry for the rambled list I posted .. I was on one thought and then got sidetracked and posted a random list of reasons selling deeds is a good thing for MA .. at least I think thats what I did.

Bones

 

[w d roberts]

.... Now, $6M shares entitle you to 50% planet profit, so the whole expected Calypso profit is $4M per year, right?

It's "gross revenue", not "profit". Two totally different numbers.

 

[humanwoman]

My deepest thought about it is that if MA would go thru IPO they could, but for some reason they do not qualify, so they do an IPO in game where they don't have to comply with any legal regulations.

Also, it unusual that shares don't have any value, if it's a real money deal shouldn't be there any par value for a share?

 

[smoothee]

It's "gross revenue", not "profit". Two totally different numbers.

Hollywood accounting is very much in effect here. They will pay out whatever they want to pay you like everything else in this game.
http://en.wikipedia.org/wiki/Hollywood_accounting

 

[Dwiss]

My deepest thought about it is that if MA would go thru IPO they could, but for some reason they do not qualify, so they do an IPO in game where they don't have to comply with any legal regulations.

Also, it unusual that shares don't have any value, if it's a real money deal shouldn't be there any par value for a share?

These are no real shares - dont forget that please. Its a virtual piece of code, sole ownership of it will stay with MA in any case Playerwise there is no real connection between the land deed and the real life except that they can withdraw the PEDs. For MA on the other hand it is the other way round - players will probably deposit - that maximises cash flow into the virtual world and will affect the real world balance of MA.

 

[mastermesh]

up to 30%... could be 1%

and i know people will say... but in the past would have been this...

past performance is not a good indicator of future returns...

not to mention if everyone is selling gear and skills to buy deeds... who will cycle peds to get taxes for u

could also be .0000000000000000000000000000000000000000000000000000000000000000000002%

 

[Dr.D.C.]

thy can use those 6million$ dollars to do all the publicity that they want but if MA don t fix the loot return people will land in entropia and will leave in a flash. And you can forget about 30% return.

 

[Few Scars]

I wonder why they are not advertising in www.mmorpg.com? That site seems to be the main place to advertise. EU barely makes a mention there.

As for these deeds, well the fact that they don't have a 1000Ped TT value is interesting. Once the 60000 are sold the value of these Deeds will really depend on the return, actual voting rights and the land available.

I assume you need 9 Deeds to claim the 3x3 land area to build on?

 

[kebplay]

If it is 30% ROI that means 5.77 PED per week per share and it will take 3.33 years to pay themselves off.

 

[humanwoman]

These are no real shares - dont forget that please.

This deal sounds like real IPO to me, since MA is selling a part of their real business income for real US dollars.

So real life laws should apply. The fact that shares themselves are sold in game doesn't change that.

Most of real stock exchange shares are also electronic and not printed on paper.

 

[remontoire]

This deal sounds like real IPO to me, since MA is selling a part of their real business income for real US dollars.

So real life laws should apply. The fact that shares themselves are sold in game doesn't change that.

Most of real stock exchange shares are also electronic and not printed on paper.

Are you sure these are shares? These could be debt obligations instead Undated, floating coupon debt obligations.

 

[Ace Flyster]

They are NOT shares

You cannot apply any laws to these deeds, that apply to shares, cause they are not shares

All MA is doing is "promising" a payment per week. There is no legal binding. The same as buying a LA, you are "promised" to recieve a % of decay on that LA. These are no different.

Just to be sure.....These are NOT shares

Think of these as little LA's, you get 25% of the gross revenue of planet calypso.

Rgds

Ace

PS they are not shares

 

[Spawn]

So did a landowner not get any promised ped ? What is the big fuss here? We have a company that has been around for years where you could deposit and withdraw and landowners always got paid. Withdrawals always came through although the wait was a lenghty one. Why is there soo much scepticism right now?

30 % roi means 3.3 years wait for one share to be paid back. That's 173 weeks which is 5.78 ped per week per share.
at 27% roi it's a bit less than that. at 20% it's even less. at 10% it's even less..

But look at it differently: deposit 1000 ped and go hunting.. what is your expected roi then? I would say it's 0% You pay for the entertainment.

 

[John B Knight]

Ok, I haven't had my morning coffee yet, but if you buy $6M shares and your maximum expected ROI is 30%, that means you get $2M per year.

Now, $6M shares entitle you to 50% planet profit, so the whole expected Calypso profit is $4M per year, right?


It's strange, who would like to sell half the planet for $6M, if it brings $4M per year?

Just wait 1.5 year and you don't have to sell anything and give away $2M every year afterwards.

As mentioned already those deeds are no shares, you get the right to receive a percentage of the planet calypsos revenue thats all - you dont own those deeds, cause like all items in entropia everything is owned by mindark and they keep all the rights. The only reason for you to be sure that you will receive your payments is to believe that it is in mindarks own interest that everyone believes in them and therefor they can take no other action then to thread their 'investors' with the upmost respect in regards to their investments in the future of this universe.
This whole universe is based on believe and this is a good thing for everyone involved as believing in something is stronger then any made up marketing numbers could be.

But back to your question, why sell rights on a revenue if you can earn it yourself and 'loose' money in the future otherwise ? Cause you have to keep in mind that this whole universe is based on cycling Peds - the more peds are cycled the higher the revenue for Mindark is - with this current move they turn some of their revenue back to the players of which most of them will spend it again ingame cycling even more peds and while many players might buy those deeds to no longer need to deposit they wont really stop deposting in the long run they will just spending more overall and help to grow the ingame economy to get even stronger. At the end of the days most of this 'payed out' money will end up in mindarks pockets as well, while alot more people will be happy ingame as they get to do more things and have more fun.

 

[remontoire]

They are NOT shares

The "deeds" are some kind of financial instrument. Depending on what type it is, determines which laws and regulations apply.

You cannot apply any laws to these deeds, that apply to shares, cause they are not shares

Now this is not only ridiculous, it is also clearly wrong. Of course laws apply and can be applied to these.

All MA is doing is "promising" a payment per week. There is no legal binding. The same as buying a LA, you are "promised" to recieve a % of decay on that LA. These are no different.

Just to be sure.....These are NOT shares

Think of these as little LA's, you get 25% of the gross revenue of planet calypso.

Rgds

Ace

PS they are not shares

LA's are not promised a percentage of decay, they are promised a percentage of loot. If a LA owner felt that he did not receive their due, they could go to court and if it is then shown MA had not paid them, they would be forced to do so.

Its like the EULA "you own nothing" clause. They can say whatever they want in the EULA, it does not actually mean that is so if it is in conflict with laws.

 

[Ace Flyster]

The "deeds" are some kind of financial instrument. Depending on what type it is, determines which laws and regulations apply.



Now this is not only ridiculous, it is also clearly wrong. Of course laws apply and can be applied to these.



LA's are not promised a percentage of decay, they are promised a percentage of loot. If a LA owner felt that he did not receive their due, they could go to court and if it is then shown MA had not paid them, they would be forced to do so.

Its like the EULA "you own nothing" clause. They can say whatever they want in the EULA, it does not actually mean that is so if it is in conflict with laws.

Ahhh crap, yes i meant a percentage of loot!

But i stick by what i said, i believe the same rules apply. It is only a promise that LA's get their 5% (or whatever they set the taxes at). The same goes for the deeds, they promise a 1/60000 of 25% of gross profit. They are not shares.

People think of shares as they have a share in the company. They do NOT with these. You are not paid dividends (they apply to shares only), you do not have a share in Planet calypso/MA.

If MA do not pay what they promised, yes you could probably take them to court.

Rgds

Ace

 

[Ace Flyster]

I may have to eat my own words, and possibly a hat

share n. 1) a portion of a benefit from a trust, estate, claim or business usually in equal division (or a specifically stated fraction) with others ("to my three daughters, in equal shares"). 2) a portion of ownership interest in a corporation, represented by a stock certificate stating the number of shares of an issue of the corporation's stock.

Rgds

Ace

 

[Cail]

it's 25% of the total, 50% goes straight to MA, 25% to Calypso and then 25% to the deed holders.

Wrong.

Think of these as little LA's, you get 25% of the gross revenue of planet calypso.

Wrong.

"Each Land Lot deed entitles the holder to a share of the 50% planet partner Gross Revenue generated by Planet Calypso."
Deeds get _the_ 50% PP revenue share, not 50% _of the_ PP revenue.
Assuming MA's english is correct.

 

[hogfather]

Wrong.
Wrong.
Assuming MA's english is correct.

Guess what? It's not. Answer is somewhere in the 78 pages citizen thread, but to make a long story short the other 25 percent will be used for operating expenses, development and (ta da!) advertising.