I have decided not to pursue this IPO any further on SL CapEx for several reasons that I will explain here. Note, that I have been thinking about these items for a while which is why I positioned the IPO process with both exchanges. Every platform does not fit every business model so I kept my options open with that in mind.
1. Investor Base
Of course with WSE being the first major stock exchange, not the first but the first major, the investor base is larger and with the inception of Ginko customers, it is more likely that more investors have the ability to invest through WSE than SL CapEx. SL CapEx is a little stifled over the Investor Allen issue and is not as viable as it can be if this was not a factor. While this is a fine setting for an established company, an IPO may not be as successful. I want the product to reach the maximum amount of people at once to make the database more fluid as early on as possible.
2. Equal Opportunity
My prospectus has been in the system for a few weeks now and waiting for deployment. I was told that there were other IPOs ahead of mine that were ready to launch before mine, when I knew that they weren't due to other issues. The most recent IPO was not in the system at all before mine was and was placed before mine because it is a JTF product. I have noticed that the only IPOs that get pushed are the ones with direct gain for Arbitrage Wise. We have seen this in the past failed IPOs and other failed attempts such as the Fantasy Football leagues and such. I do know that the purchase of AVIX was to find investors for JTF businesses and those that Arbitrage have stake in so everyone else pretty much is not the priority. This is his exchange and he has every right to do as he pleases, but I would rather have the LLCA IPO be in an unbiased realm.
3. Usability
WSE has deployed some awesome features that will make running LLCA close to easy. Starting from the beginning with these features will set the standard and not make me have to come back and play clean up later. Investor voting deployed from the portal allows the CEO to get the opinion of all its investors without having to hold meetings in everyone's times zones and worry about missing someone. Integrated financial analysis and financial reporting forms takes me about 15 minutes to gather those numbers rather than 1-2 days to fill out the GAPP compliant form so my paperwork time is cut dramatically allowing the focus to be on the product itself.
These factors have been on my list of considerations from day one of trying to deploy the product separate of LLBT. I have come to a conclusion about the share breakdown with regard to LLBT investors incompassing the changes made to the prospectus for the WSE model. The prospectus is the same minus a change in the share breakdown.
Total Shares = 5,000,000 Shares to IPO = 1,000,000 at $1.00/share
25% to IPO
25% to LNLBT Miles (representing LLBT shareholders and this alt will hold a spot on the board of directors acting as the voting proxy for LLBT shareholders in LLCA)
15% to Chairman of the Board (Lindsay Druart)
10% to CEO (Lindsay Druart acting CEO then to Mateo Infinity)
5% to CCO (Luke Birdbrain)
5% to CTO (Unoti Quonset)
5% to CFO (Undetermined)
5% to COO (Undetermined)
5% to LLCA Alt (Undetermined, that can be used to sell back to the public should the need arise)
Pay to C-level executive above and beyond special projects (i.e. system build by the CTO) will be made via dividends that will be paid monthly at 25% of that month's profit as long as it is above the $.01/share threshold. Dividends paid to LNLBT Miles will be distributed as a special recurring dividend to LLBT shareholders that is not subject to the LLBT dividend policy with regard to the current buyback. Undetermined positions granted shares will be held by the Chairman until those positions have been filled. Mateo Infinity will assume the CEO position at completion of IPO and system deployment and the President position will be retired.
This is what I have come up with so far. Please let me know what you think and I will make tweaks as needed. Thank you for all of your continued support in the L&L Brand.
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9 comments:
Lindsay,
WAYYYYY back, after the sale of AVIX to Arb, I posted a comment on the SLCapEx Forums about conflict of interest. I thought, and still do think, that COI exists in the exchange to the detriment of the investors - regardless of intent. I can't find the original post and followups - either because there is no good search tool in those forums, or because they were in the old AIG forum, which has since been removed.
I am curious as to your opinion of COI, both back when you were President of SLCX, and now, given the current circumstances. I don't raise this issue again to embarrass anyone, but to inform investors of the potential outcomes of perceived or real conflicts of interest.
I do remember that posting Wellington because that was an issue put in my lap with me having companies listed on two different exchanges and being president. In everything we do in SL there are going to be COI's, but it's up to us, and our own personal integrity to not bank on or profit from those conflicts. Being the prior president, of course there is information that I know that can be possibly frowned upon or damaging but that is in any business. This is the reason companies have NDA/NCA to protect trade secrets and other information that is management information and not public. And looking back, Arbitrage should have obtain NDA/NCA on everyone there since his original staff has all quit and there is information out there that I am sure he does not want out.
Now, well, SL CapEx is Arbitrage Wise, a JTF product. It is his to do with what he wants and I, nor anyone else in SL can combat that. Just like Luke at WSE, that is an HCL product and it is his to run as he pleases. We just have to deal with it and do our own due diligence to find the best options for us as investors and CEOs. Everyone's motives for doing things are not the same.
This doesn't have a whole lot to do with the current posting, but I wanted to get your comments on the following posted by Arbitage Wise today regarding the "new IPO that got pushed ahead of yours".
"We initially start with the sales of 2 million shares. As we need more funds, we'll sell the treasury shares. Since we're paying interest as dividends, the ownership percentage will not be a factor in how much the certificates earn."
This fails the Ponzi test right off the bat. Arbitage states he will sell treasury shares "as we need more funds". Thus taking the funds from new investors and using them to pay the old investors.
With that as an example from the owner of the exchange, who can blaim SL CEOs for taking the opportunity to "grab and go" with investor cash?
As of last night I have withdrawn more from my SLCAPEX account than I originally invested, so I no longer have a stake in this race, but am playing with "free money", but I still hate to see blatent schemes come into play.
Your comments on this would be very welcome Lindsay!
This was an interesting IPO as I don't fully understand it's purpose. Investment Certificates sound like Bonds to me but in normal cases you can't have treasury shares with bonds because they aren't true shares and treasury shares don't recieve dividends but dividends paid go to all shares on the books. With that being said, there are no true treasury shares so there should be no treasury. Does that make sense?
Lindsay,
Can you explain to me why
1.000.000 shares reserved for the IPO, is 25% from the total of 5.000.000 shares and not 20%.
Or did I miss something.
The 1 millions share is what is currently on the prospectus but NOT necessarily in the breakdown of the number.
A quick little musing for Savvy; It might mean if they need more money to do their investment... 'Oooh! Opportunity; gee. What we have is tied up right now, lets see if the investors will give us more to use'.
But if it does mean so they can pay out the 'interest', you're right. A little ambiguous as it doesn't say why they'd need more.
I have to admit, I'm pretty guilty of not following along with this IPO of yours, Lindsay. I promise I'll look at it soon though!
I did blog about the JTIC thing in the "Interesting things post..." and no problem Tumult. I know I am second rate on your list :P
Hey wha... I'm not too sure how to take that comment, even if I didn't think you were making a joke.
If I were to consider you 'second rate' on my list, it would ONLY be for a lesser dividend to share price ratio than some stocks, or more importantly, just investing in the LNL bank. That's it. You've shown good policy and drive up until now, so I'm not worried about your character or anything.
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