The poll in which we asked you to vote whether LEM should implement a new approach for the evaluation of virtual assets and the security of sharehodler equity ended recently. 60% voted yes, among them our major shareholders. As a result we will bring this new evaluation in place and take measures to protect the shareholder equity in case of failure.
Only 10 persons participated in the vote what I think is an amazingly low ratio compared to the 70 shareholders we count. We could have expected a better participation. Does this means that a bigger part of the shareholder's community simply doesn't care about virtual company evaluation or protection of the shareholder equity? We cannot answer this question. For us the evaluation of the assets of LEM and the protection of the shareholder equity has a mere ethical dimension. It makes a difference for us whether you tell a potential investor, "you have to consider that if you give us money all can be lost" or we say, "you trust us money, so we take measures to protect the shareholder equity as best as we can and take a moral commitment if things would go wrong".
Such is exactly as we will proceed. In the future and the first time for the financial report of 2Q2012 we will proceed as follows:
Liquidation reserve
The most important measure is the protection of shareholder capital. We studied different possibilities. To keep things easy we will build up a cash position at PayPal till it reaches the nominative capital of LEM. As we have 2 mio shares with a nominative value of 0.5 $L per share that gives an equity captial of 1 mio $L. We hope to build up this liquidation reserve within the next two quarters. It looks as we won't have a bad next quarter which permits us to work straight forward in this direction. The liquidation reserve will find a seperate entry in our financial report, the first time for the 2Q2012.
In case of a liquidation that liquidation reserve would entirely be at disposal of the shareholders. You have to add to this the other assets like shares, participation, intangible assets etc which would be sold and would also contribute to the liquidation dividend.
You can criticize that a liquidation reserve is also not safe at Paypal and out of control of the ordinary shareholder. However, we think it makes an ethical difference whether we put the liquidation reserve in our financial report and show a commitment to it, or we just let the shareholders bear all the risks - "we have told you before that you might lose everything"... lol. Also, and this is an important point, the liquidation reserve will be outside CAPX and SL. RL is still a more stable environment then SL....
Portfolio evaluation
- SL goods: 25% of the sale price in SL
- Real estate in SL is estimated with 50% of current evaluations in world. Right now ca,. 125'000 $L per SIM.
- Cash: 90% of the value in $L
- Shares at virtual stock exchanges: 10% of market price
- RL equipment: No value as not addressable in a liquidation
- Intangible assets & goodwill: No value if no prove can be given
The profitability of LEM might be harmed a bit by these measures, but on the benefit of more security. And be assured that we are not planning to liquidate LEM ...
Again, happy trading
Greetz
Casper Trebuchet
LEM, chairman
2 comments:
Casper,
Holding money in a rl environment doesn't add any security for your shareholders, quite to the contrary.
Only circumstance where holding money outside of sl will prove fortunate is if SL collapses. But sadly if that happens you have no way to reach your shareholders to make them happy with your rl money stash.
In all other circumstances including the one where you run under a bus inadvertently, holding money in a rl account instead of at the exchange will mean that money is not accessible for shareholders.
You're making this way too complicated, and you're confusing more security for you as the major shareholder with security for your shareholders.
My conclusion is that indeed this entire thing you're planning will only lead to decreased profitability for LEM and a lower shareprice. Neither of those two are in the interest of shareholders.
Marishka
Marishka,
I see this differently. First it is a question of probability. What is the one that SL or CAPX is collapsing and the one for longlivity of Casper...the first ones you have to be multiplied - so guess. The result is also a question of faithfulness in Cas of course.
Anyway, if SL is docking then probably not just over night as quite a bit of money would be involved. So there would be time that the shareholders put their avatars in evidence with RL identities and are approaching me. I don't see a problem with that and it can be done.
And if a bus is kissing me, well there are ppl who know that this Paypal is linked to SL "business".
No, I think the way I proceed makes sense, considering the circumstances.
I don't see how the profitability should be lower, as all the fancy virtual assets still exist and create revenues...lol
Take it that way, LEM makes a kind of commitment what we are not supposed to do. All the rest is a question of faithfulness and view. if you don't feel comfortable with it then just sell your shares.
However, whether this decision will lead to a lower shareprice, I don't understand. We just estimate assets much lower as other's do. That has no impact on dividends we receive or distribute. The only difference is that for the time being we fill more likely the liquiditiy reserve up then do new investments. So what? I think the market should decide about the shareprice and not we.
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