What are Ginko Bonds worth?

I saw some talk about short selling Ginko bonds on this thread here:

Everyone has said their 2 cents worth, so I guess I'm no better to add mine.

I think everyone is forgetting that this started with SL baning the casinos. They started pulling their money out and selling their land. SL has been quiet about this, because even if they loose money, we're set going to pay the monthly fees and the tier rates.

When the money started leaving Ginko, Ginko was able to handle it because they had plenty of money in WSE. All he had to do is sell the shares of stocks. But guess what, That ended before he could get the money out to pay everyone which by then were trying to get their money out. Me included.

So I guess if I were a financial institution and came to you and asked if you would hold the bonds of some 40 thousand accounts, You would jump at that opportunity. It didn't hut that Ginko also had some 33% of WSE hiopecapital stock.

Now come the reality check. Telling all the Ginko holders they now have to have an account with WSE and the bonds aren't worth crap. Well WSE figures while people are there, they might buy some stock in other companies. Sure, why not, when the share are selling low.

Least we forget ALL companies in SL suffered at the loss of Casinos, so why not invest into the ones on WSE. Well I did. Looked like a pretty good investment, beside I had to be there to see my Ginko Bonds go to crap.

Now I have 11 companies with a lot of shares. Let me see, what am I suppose to do with these shares. Oh I know, sell them with the price is above what I paid for them and make a few bucks. Okay I got that, here we go, a couple companies stocks went up, so I listed the shares at the same price. Then waited , and waited and waited and waited. Nope the asking was still the same, but my share were still sitting there at the same. Oh but wait, another guy just sold his. but he sold for .51 when it was still .75. WHY WHY how could this happen.

If you can't sell your shares and wind up selling them for less then the asking price..there's a scam. NYSexchange would call it a fraud. I figured this is just a problem with this company, so I waited for others and did the same for others and the same result.

Support you might be saying right now. Well I'm ahead of you on that. Just has Nick was transferring and Luke was glad to accept, I was able to chat with both.. I can understand no longer contact with Nick, but Luke, well I get he's busy. Oh as if I like that excuse.

Go online for support...where..the chat hahaha..that's a joke..so let's see, I know, I'll look though WSE web pages and see if I can find some email address's. Nope, But I did find someone that recommended go SL in world and to WSE there. So I did, That was a circus, Did WSE recommend all 40 thousand to go in world..

After pushing through the crowd and making it to the counter, I came across some one that I thought could help me. He's answer. Email support. Okay, why are you here. He said to answer questions. I said you hadn't answered mine. He said. I don't know what to say to you..

The last thing I said to him before I left..Your going to love this one.

I said, I trusted Ginko with me money, can I trust WSE with it.

He sent me a smiley face


LOOK OUT WORLD.. about to bend over and feel it again

It sounds like you don't understand the free market process. There are bid prices (the price someone is willing to buy at) and the ask price (the price someone is willing to sell at). If you have your shares listed at .75 as an ask price and someone else has a bid price of .51 then all anyone who has shares that he wants to sell immediately has to do is sell to the highest bid price .51. If your ask price is the lowest at .75 you need someone who wants the shares immediately to buy them at your ask price.

worthless junk bonds

No, Svar's right. You're looking at the spread, that's the gap between the best bid and ask price.

No, Svar's right. You're looking at the spread, that's the gap between the best bid and ask price.

I'm actually surprised the concierge wasn't able to help you as it's basic stuff.

"a high-yield bond (non-investment grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors."

so they're not worthless.

Way back in post # 7 of this thread, I started trying to get a handle on what changed between the original-issue GPBs and the current GPBs, after conversion of Ginko bank deposits. Perhaps everyone else grasped this at time of conversion, but here's what I found in the short history of GPBs and the Ginko bank collapse:

May 16 - GPBs offered at L$25, to pay L$1 per month, with a L$100 call (par*4).
Jun 1 - GPBs pay L$1 dividend per bond.
Jul 1 - GPBs XD L$1.
Aug 1 - GPBs XD L$1. Any future offerings to be priced L$100.
Aug 6 - GPBs split 1:100 (L$25 original-issue bonds cost L$0.25/split bond).
Aug 8 - Future GPB dividends to be payable quarterly instead of monthly.
Aug 9 - Ginko bank deposits converted to GPBs at L$1 each.

So the conversion of bank deposits took place after a rapid sequence of steps effectively devaluing GPBs as an investment: In contrast to the original issue, the new deposit-converted GPBs cost four times as much for the same bond (and the same dividend), and are callable at par rather than 4 times face value at purchase. Moreover, both original issue and new GPB investments are now at risk for 3 months between dividends whereas the original terms were for monthly dividends.

Now, I'm not sure I'd call this a sweet deal for holders of the original issue bonds, since their investments, too, were degraded--just not nearly as much as the bank deposits.*

What I don't know is how many bonds were in the original issue, nor who holds (held?) them. We know there are currently 197,997,594 GPBs outstanding, but how many came from the bank deposit conversion, how many from the GCS conversion, and how many in the original issue? Does anyone know a way to get at this kind of historical information, from the WSE site or by some other means?
________
* Not sure this is normal practice. Had there been a bankruptcy, would one debt instrument have been favored over another, and if so, would it have been this way 'round?

Before the debt securitisation approx 1.6 million GPB had been subscribed and were outstanding (after the split). GCS conversion isn't yet included in the bonds outstanding at the moment (that'll take another 2-3 days according to a WSE announcement). I imagine WSE would have most of that historical data or at least should be able to reproduce it from their records.

Bonds from GCS conversion aren't yet included in the bonds outstanding at the moment (that'll take another 2-3 days according to a WSE announcement). I imagine WSE would have most of the other historical data or at least should be able to reproduce it from their records.

Bonds from GCS conversion aren't yet included in the bonds outstanding at the moment (that'll take another 2-3 days according to a WSE announcement). I imagine WSE would have most of the other historical data or at least should be able to reproduce it from their records.

Worth? Hmmm... Toilet paper?

well, you have to admit, Inigo, under the right circumstances even toilet paper has some value attached to it.

There were a little 11 million bonds in the original issue when 185 million Ginko depositors bonds were added. The difference between 196 and 198 million must be the GCS conversion. Midas Commons had over 50% of the original bonds but dumped them down to .12 per bond before the Ginko depositors bonds were added and people who bought Midas's bonds at .12 were able to sell then the same day for .24 or higher.

Utility value? Possibly.

He could and others could. That risk seems pretty clear. If you invest in them, diversify. Beyond open books, that is the bottom line in-world or real-world with or without regulation.



The ones I pointed out were cosmetic because I knew those are easy to see.



Do you mean the short period of time that withdrawals were put into a queue for first come first serve?



I understand the suspicion. You don't need to convince me there. The problem here is that the hype, itself, of being said a ponzi scheme is suspicious, also.

Given the bank run and the hit on WSE near the same time, it is impossible to say they are totally unrelated. It's only fair to investigate under that pretence.



If my account would not get disabled one the event of logs being posted here, I could be rude about it and post it all here.

Perhaps, if there is a clear notice in WSE group chat that all text can and will be recorded and can be published without notice, it may bring about some order to the chat and the hype that gets involved and it. It may even help prevent another bank run based on chat hype.



Right. The ones that aren't gong to lose anything are the ones who bought the GPB bonds from that start before the conversion, correct? Even better question, would it be insider information to know that the prevous Ginko assets would be dumped into GPB after the conversion?

Being one of those "simple minded" fools that trusted Ginko and having used Ginko for a period of time with good results, I was dumbfounded at what has since transpired.

Yes we are all aware of the "put your hand in the fire, it's going to get burnt" and I accept that I made an unsound judgement to put my money in the "bank".

I guess what I wanted to say is that many of us would have felt a little better if we had seen one small Iota of regret, remorse or apology from Ginko.

My investment loss 30,600 lindens. The loss to my friend who I suggested use the Bank 30,000 lindens. The loss of another friend 94,000 Lindens. Total Loss 154600 Lindens.

Kudos to Ginko for scr**ing everyone over so perfectly. I would have had more faith in the future of Ginko and ultimately my cash future, if I had seen the remorse or even an apology.

The benefit of what has happened now is that No one will be stupid enough to fall for this again.{I hope}.

People have become real life Millionaires on the backs of the people in Second Life. Linden Labs wont regulate the Property swindling, the land grabbing and selling of said land at major profits because linden labs make money from it regardless.

Therefore I cant see LL's doing anything about Ginko or other financial institutions in the future.

Let us all learn from this in our future in Second Life.

Quit fooling yourself - they are Worthless


I checked Standard & Poor's and Moody's Investors Services, and they are not listed, so hence WORTHLESS, only a fool would buy them.

Nuff said.....

While it may be hard to argue against the "junk bond" status, those order of events show the equality of the bonds to be not as far apart as some of the hype has carried.

I think any member of the SL-SEC would be concerned if there is actual evidence of an insider job. There is talk about it. Given the course of events and that the spread on bond value equality is not too broad, further investigation seems kind of not worthwhile. unfortunately. If the said equality spread became unrealitic, I'd trust the WSE to put a stop to it based on its virtue. To prevent NP to buy less than L$1 doesn't seem enough, however. Perhaps, that lack of security, being that anybody even a alt of NP could buy less than L$1, will become a way to redeem trust. Time will tell.

You are wasting my time, and have been intentionally argumentative or obtuse for no reason on the point of whether or not regulation exists.

Unless you know of something substantive about the functionality that implicates a broader involvement by others with the conversion/devaluation, quit wasting our time.

Quite candidly, my theory is that Ginko stole from WSE. But that is just my theory.

Ever hear of paraphrasing? We don't need it verbatim.

Well there are a few people I would expect to know of the coming dilution of GPB. Nick, Hinoserm, and whoever else is on the Ginko staff. I don't know how much Nick discusses with other people, especially Luke.

The dilution of GPB was well publicized which caused Midas Commons who owned over 50% of the bonds before the dilution to fire sale over 40% of the total number of BPBs at a considerable loss. You will have to ask him why he did it but the fact is once the Ginko bonds came in the price went back up and to this day sell well above the average price Midas got for his bonds.

I already stated my position, and I don't accept hyperbolic phrases as facts. I just stated my conclusion, so you didn't need to waste any more of your time and respond further.



I am very familiar with how computers work. It doesn't take that much knowledge, however, to tell when a program has changed. The motive of the change is what is at question, not the change itself.



With those two statements above, I doubt I have to even attempt to paraphrase (or even be accused of out-of-context quotes for) what has been said.



A few that have admitted to work closely with Ginko also work closely with WSE. That is were the conflict of interest starts. There is no regulation to prevents it at this time. There is, unfortunately, policy that prevents it being publicized. I'll repeat it this way -- The WSE chat group, the Ginko chat group, and any other form of stock exchange chat group should have a bold statement that says the conversation is being recorded and can and will be published. Period.

True. I haven't asked, but I imagine that Midas probably intended to hold it for the long term - why not, when you see the previous stats about what it was worth? Nick slashed the value of that bond into fourths. Considering everything, it is probably a vote of no confidence in Ginko.

That's kinda true for the original-issue investors. GPBs seem to be trading at about L$0.19, which represents only about a 25% loss for those investors (who also got some very nice dividends at first). It's really only the converted bank deposits that are hurting, having lost 80% of their value. Or, equivalently: if a miracle were to occur and the bonds were to be called at current face value, the bank depositors would break even (less missed interest payments), whereas the original-issue investors would enjoy a 400% windfall (plus dividends already paid).

But Svar's helpful statistic of 11 million (split) bonds in the original issue gives one pause. At Ginko's scale, it's such a small amount of capital, why even bother with the offering in the first place--except perhaps as a future home for the bank deposits?

In fact, one of your posts, Dzonatas, got me thinking about the Ginko collapse as a Ponzi scheme being "too good to be true." I doubt the intent was to prompt thinking about just how much worse than a simple Ponzi scheme this all might be, but that's what I thought: what other fraud might have been perpetrated that, in contrast, would make a Ponzi scheme "too good to be true."

[Wild_Speculation]

One reason to wonder about that is the resolute insistence of Ginko that it will not open its books. Yes, there's no regulation that says it *has* to, but opening the books would have stopped the bank run long before a liquidity problem arose--unless the books held something very, very damaging. It's implausible that there exists a reason so compelling that it justifies losing the whole bank for the sake of secrecy. So, I think we can safely conclude that the records indeed *were* very, very damaging.

So what might we learn, if we could see inside the bank records? A simple Ponzi scheme would just show too few assets to cover deposits--the result of paying interest from capital (e.g., new deposits) rather than distributing income from investments. That would be embarrassing but the bank could likely ride it out by just asserting somewhat inflated values for whatever assets exist.

But I think it may have been much worse: it's possible that most of the *deposits* never existed.

The scheme would work like this: For every L$ actually deposited, Ginko claims some extra L$s in deposits. Of course, the books will look truly dreadful because there's no way to have enough assets to even begin to cover all the *claimed* deposits. But for this stage of the con, as long as nobody sees the books, it doesn't really matter because the imaginary depositors don't have to be paid any interest. Interest payments to the real depositors can just feed off new real deposits, as in a regular Ponzi scheme. And the huge discrepancy between total claimed deposits and in-world investments is explained as investments made outside SL.

Now the con needs a way to convert imaginary deposits to real L$s, so the perpetrator(s) can reap some benefit. Withdrawing the fictional deposits directly would be very easily traceable by a Linden. So, let there be bonds. Get a few investors to buy the bonds for a while to make it look like a real debt instrument. Then wait for a convenient excuse (like the gambling ban) to engineer a bank failure, and convert the deposits--both real and imaginary--into bonds. Thus the imaginary deposits are transmogrified into debt claims indistinguishable from those for real deposits, and can be traded on the exchange by their fictional account holders (perhaps alts of the perpetrators).

There might be yet more to such a scheme, but once the bonds from the fictional deposits clear the market, GPBs could just keep paying dividends from the proceeds of liquidating remaining assets till there's nothing left--which could take a while, and nobody would know, because the books aren't open.

[/Wild_Speculation]

So, did anything like that really happen? Well, the advantage over simply stealing the original deposits would seem limited to the possibility of Linden traceability and public blame being shifted or diluted by conversion and by the long delay before GPB interest payments consume all remaining capital. It would just buy a lot of time and perhaps some anonymity.