Interesting things happening at SL CapEx

So, I woke up this morning 3 hours early with a headache comparable to a hangover despite the fact that I don't drink and decided to poke around the CapEx forums. Since coming off my "mute" status over there and actually being allowed to post again, I don't troll there much anymore since my posts would probably get deleted eventually any way....but anywho....

I came across the most interesting thread I have seen on the forums in a long time. The thread is titled "IPO Funds. Where do they go." Arnaud Villota's argument was that IPO funds were not escrowed and wondered why because Ima Janitor of MECH had been told he would not get his IPO funds up front at completion. Arbitrage Wise's response was basically, the funds are used in the bank to make money since interest was being paid on those funds and that he would rethink paying interest at all on those funds.

A few things are interesting about this if you apply simple logic to this situation. Arnaud has a valid argument. Escrowing IPO funds in the future to prohibit JTF's operations from impeding on investor funds makes perfect sense. Arbitrage rethinking paying interest on IPO funds is also very valid especially if he decides to use an escrow service. So here we have two very valid points from both sides of the house but I have a few questions. And here come my bulleted points that I so love to use in my blogs.

1. SL CapEx charges a fee for the IPO. Shouldn't most of the fee offset at least some of the interest? In this realm it is like the CEO of the IPOing company giving an incentive for purchasing that is offset by the fee paid to JTF. Possibly to keep the interest going and still make their money, JTF might consider a higher fee for IPOs or give the CEO the option to pay interest during the IPO or not.

2. SL CapEx and JTF are supposed to be two separate entities operating on the same platform. Why would JTF be using IPO funds from SL CapEx in JTF operations outside of the exchange? Maybe I missed something on this one but I would think that CapEx funds would be used for CapEx operations. This one I am cloudy on since I am lacking some key elements. Possibly this was done since interest payments come from JTF......

3. The current amount in the MECH IPO is roughly $2.5 million. With JTF having $80 million plus on the books in deposits, is there a liquidity issue somewhere that would stifle JTF to pay out $2.5 million at once? A familiar smell passed my nose when I pondered this one at 6am and it smelled of Ginko but the smell was quite faint so it could have just been the euphoria of sleep deprivation and migraines.

4. The JTIC IPO closes quickly....nice....giving JTF another $2 million in funds and 28 million "shares" to sell back to the public at convenience. Isn't this what we saw from BNT? The personal piggy bank? And what are these funds being invested in? The prospectus is about as vague as an androgynous man...woman...yeah...you know what I mean.

Here's an interesting quote: "We will raise funds through the issuance of Investment Certificates, and move those funds to our trading accounts. Once the certificates mature, we will convert the USD back to L$ to buy back the shares at face value."

That statement alone leaves to many questions to be asked. Trading accounts? Convert to USD? Face value? What I gather from this is that these "certificates" will be converted to USD to be traded in an account outside of SL and then brought back at maturity for their value at that time. WOW! What an awesome product this is, but nothing in the prospectus states invested in what and with whom.....

Very interesting stuff indeed....*grabs a bucket of popcorn and settles in*