What are Ginko Bonds worth?

Well, in the interest of full disclosure, I had the equivalent of US$6.25 in the Ginko Bank, which converted to GPBs. But I don't understand how that helps me evaluate my GPBs. Their face-value is US$6.25 (modulo any L$ exchange fluctuations), so I guess in some sense there is US$6.25 "on the books" for me, but I don't know if there are *any* assets left attributable to GPB, or if the owner's assets (whatever those may be) are split between GPB and other instruments, or even if he claims some of them as personal property. I just don't see how I can know whatever became of my US$6.25. If somebody can demonstrate that there's now US$12.50 in assets backing my GPBs, I'll have to break out the... well, the Thunderbird, but I'm sure the high-rollers could spring for some bubbly on that happy event.

Wait, is that a claim there was never a deposit ever made into a Ginko ATM? Forget the answer to that because obviously depositers exist.

Now there are people (especially ones that never ever invested in Ginko before) that say what was deposited is only worth L$0.000001 per L$1 that was deposited. That fact is pretty clear.

Can you quote from the GPB prospectus exactly where it says the bonds are backed by Ginko assets and that bondholders have a right to convert their bonds?

I double-checked that. Current shares equal same shares as deposited, so where is the split? =)

WSE site's down now so I don't know how you double checked it.

I haven't heard anyone say that Ginko lost the record of their deposits, but that was never the issue. The question is, where did those Linden dollars end up? According to NP they're tied up in unspecified investments. According to the torch-and-pitchfork crowd, they got sold on the Lindex, and the proceeds went into NP's pocket, never to see the light of SL again.

What NP did was take the money, and gave you an IOU. Then turned that IOU into a different IOU that is really an I(don't)OU. The money itself... is lost in the mists of time (or the local ferrari dealership).

The site is down at the moment, yes.

The account of shares is something I checked about an hour or two ago before you asked, which is still on my browser tab.

I can't access the WSE website from here because it appears to be down but slquotes.com has the accouncement archived. You can read the original WSE announcement at this link when the site comes back up:

No one (except for the owner of the GPB company, or someone with access to his records) can prove what happened or did not happen to those deposits. Just as I cannot claim to know for a fact that they evaporated, you cannot claim you know for a fact that the money is intact. You seem to be asserting that without more information, the default position is to assume that the money is intact. Is this correct?

Trust us. It split 100:1 on Aug 6, right before the conversion of balances into GPB. I can't believe you're making us look this up for you.

Google cache
http://64.233.169.104/search?q=cache:ZLZ1lx45r3AJ:www.wselive.com/research/\
announcement_detail/2159+gpb+ginko+split&hl=en&ct=clnk&cd=3&gl=us

"Dear Bondholders,
In order to ensure greater liquidity and allow for purchases and sales in smaller increments, all GPBs (Ginko Perpetual Bonds) are being split in 100. You will receive 100 bonds for every 1 you currently hold. The terms remain the same, except they are all split in 100 as well. Specificaly, you will receive L$0.01 in interest and the face value of bonds will be L$1. The yield, based on the face value, is of 1% a month or 12% a year. However, given the current market prices the yield is now in the range of 7-10%, or around 100% a year.

Best Regards,
Nicholas Portocarrero"

August 06, 2007

*drops down financial menu*

*changes ginko default position to Ponzi*

About the split: if someone deposited L$100 into the Ginko ATM, then they should now have L$10,000 GPB shares, correct?

No.

Holders of GPB PRIOR to the forced conversion now have 100x as many bonds.

Those who were forced into holding GPBs have a 1:1 ratio of bonds. Your 1L is now worth .17 or whatever it is right now.

No.
Here is the timeline
On Aug 6, all GPB were split 100:1. Ginko savings balances were not involved at all.
About one week later, Ginko balances were forcibly converted to GPB shares at 1 share per $L1 deposited. On that day, the market value of 1GPB was about L$0.20 give or take 10 cents.
Clear?

The amount of Bonds given to depositors was based on FACE value of the bonds.

Thus if you had 1000L in depostis you now have 1000L in Bonds.


The actual value on the market of those bonds is FAR less. Around .17% of face value.


The 1:100 split is simple.

the Bonds originally had a face value of 100L now they have a face value of 1L - the amount of supposed money remians unchanged.

Thanks, that clarified up those points to point out the order of those events. It also shows how clearly there are two major views on this, which is some see it as a ponzi and others don't. It depends on what position you are in with the investment and rather if you started with the ATM or with GPB before the conversion.

Correct. One can conclude that it wasn't a Ponzi scheme simply by ignoring a large portion of the available information, namely, everything that happened before the day you invested.

Yea, people who lost their money tend to think it is a ponzi.

At the moment, no. Even if I pulled it up (through the main website, or through the cache), it won't seem to matter. What we know from above is that there is actual L$ there, or at least was there. Where it is now is polluted between conversion and the accusation of extortion (i.e. ponzi scheme).

There appears to be more to it than that. Before we get into it, I wonder why was the conversion even allowed?

Allowed by who?

Nick could of said, "Hey people, I blew all your money on hookers and beer!" And the Lindens wouldnt have done anything about it.

I understand that. This is different because the order of events. It is not a subsequent flow of return like a Ponzi scheme.

There is no regulating body, and Nicholas could do damn well as he pleased. Theoretically, he didn't even have to put it on WSE. He could have issued the bond to you and you could try to find a buyer yourself. But since he profits from WSE's profit, it helps to now have an extra 190+ million bond shares on the market. The question is why Luke allowed it to be listed. But Luke responded appropriately and forbade him from buying the bonds at less than face value.

It became very apparent during the bank run that he wasn't putting any money back into the cash reserve from the investments, and that the whole organization was being propped up on the flow of new money.

The Original Ponzi Folded and he handed out IOUs

Thats all.