What are Ginko Bonds worth? - 2

Exactly -

If they mature, then they will finally get their original account balance back, plus any dividends between now and then - that is all

that means the alt I used to open an account with 1L just before he did this can have his 1L back in 8.5 years woot!

Anyhow if this isn't clear to anyone at this point then it will never be clear. Add on top of it he probably wont be paying any dividends and its questionable if he will be around in 8.5 years heck even if SL will exist in 8.5 years there is an issue. We have to remember that ginko no longer exists as an "institution" only the avatar that opened it up did. Ginko the "bank" where people could store their lindens and make interest and take them out when they please is gone and for their patronage they were given 1/4 on the dollar the value of their account which they can have back in 8.5 years assuming he is telling the truth ... which well at this point I would umm bet good money that he is not! (that is of course if gambling wasn't banned and I could find a sucker to bet with)

They have perpetuity -- not maturability. It doesn't seem like you and Will are clear about this.

Well, I kinda think that may add to the confusion. The initial offering of GPBs was for L$25/share--the "real market" of the offering was the price that Ginko set for the bonds. (We don't have to call that "face value" but it was the price one paid Ginko for a GPB.) The L$100 figure for those bonds came about in two confusingly unrelated ways: first, it was the "cancellation" (call) price for those original-issue bonds, and second, it was the projected price Ginko said it would charge for any subsequent offerings of the same bond, in an August 1 announcement: "Any future offer will be in the L$50-L$100 price range, most likely L$100 only."

god nevermind i giveup

your ignoring the fact that money was basically taken from people on an empty promise of possibly maybe paying it back one day ..

Here is what Nick has said ont hese very forums about the face value.


He very clearly decided the 100L $ face value meant something and that the Ginko bond was worth a claim against 100L of Ginkos assets At some future point.

After the Split that became 1L $

Now the face value means nothing on the open market - thast true , but that DOES not change the fact he gives them a face value of 1L

The face value of 1L means everything when you realize he traded them dollar for dollar at said "1L face value" for his outstanding Debt.

He did not issue bonds based on their current market rate - He clearly said he was NOT going to do that.

Im absoultely clear.


HE converted his Debts @190 Million for @190 Million Bonds the Bonds have a Nominal face value of 1L

If they were a piece of paper they would say 1 Linden on the front. - It doesnt mean they were worth that on the open market.

I am using the term face value becuase thast what Nic P / Ginko says their face value is.

I never claimed they were worth that on the open market - and neither does Nick. I provided the quote.

He DOES claim they are WORTH 1L though - eventually. HE predicted 1 to 2 years to be able to pay people back.

For a perpetual bond, that is when the interest/dividends equal the value for which they were used as a debt instrument.

Rough equation based on a fixed "face value" for which the payments are based, not compounded: 1% per month means 100 months to repay 100%. 100 months is about 8 years and 4 months.



k

Just remember the payments made after 8.4 years is pure interest/profit.

Thats not how it works at all.

Thats the point where the accrued interest payments match the Face value of the bond. Its not repaying the bond, at all.

Of course he's not paying that much, he changed the rules in the middle of the game - and later than the May announcement you keep reading. In August, ALL GPBs became cancelable at 1L/bond. It is just that because as Qie said earlier, there was no reverse split, those early GPB holders functionally purchased each 1L bond for the equivalent of .25L since the original GPBs were callable at 4x par. But those are no longer the terms that Nick is working with.

your closing your eyes and I want to know why?

I pay you 1 real world dollar and in 8.5 years you turn around and pay me 1 real world dollar that is 0% interest rate there is no profit or interest.

he has not said he will be paying them more then the face value he intends to only pay back the face value thats 1L. He also states that the bond will never go beyond that face value if you read the post. That they only ever will be worth 1L for him and never 2 or 3 or 100L for these people. There is no 100% profit there is 0% profit. He is simply paying them the money he took away from them 8.5 years ago.


How many times does one have to tell you that they will make NO PROFIT
that they are a face value of 1L THE END

why are you not understanding this?

Yeah, I understand. See, the reason I keep carping about the L$25 price of the original issue bonds is that there was some serious magic that made those suddenly eligible for a 1:100 split into L$1 bonds. Imagine on June 1, Investor A buys a GPB from Ginko for the offered price of L$25, and Depositor B deposits L$25 in Ginko bank. Time passes, some interest and dividends are paid, splits and conversions happen, and now, presto-change-o: Investor A has 100 GPBs and Depositor B has only 25.

Had this been a RL bankruptcy, Depositor B would have fared very substantially better than that, relative to Investor A. And in RL, if *not* a bankruptcy, Depositor B gets L$25 on demand, no bonds, no bullsh*t.

well less different then you might think , since I can buy those same $100L worth of bonds now for 10L

I read the quote above, he used "face value" in the context of interest/dividends. In that sense, he fixed the what interest and dividends will be paid on no matter what the market value is at.



It would be possible to make faster payments to quicken the basic 8.4 year time if he can be a market maker.

In his last announce about the buy back ban: "I have been informed by WSE management that I am, effective immediately, forbidden from purchasing GPBs at market below the face value of L$1."

There he uses "face value" in the context of exchange rate, hence "at market." The market's "face value" is being closely related to the same value of what the dividends/interest is based upon. Here, WSE made it so that he can't be a market maker while they are less than L$1.

Without him being a market maker, it lowers the risk but extends the time the principle is repaid.

If he makes another dividend/interest payment, I wonder if there will be an option to lift the ban.

Yes, well, it's still four times as much as the L$2.5 for which you can pick up Depositor B's GPBs. But you have a point: eventually, 100 * 0 is really close to 25 * 0.

I had the same comment as you when Nick pulled this face value stuff at first - why do outside investors get a discount depositors dont. But he had no intention of making that fair.

The Face value is the $ number he converted his Debt to bonds at. This is the most basic thing to understand about all of this.

That is also the reason he is not allowed to buy the bonds at market rate. Becuase if he does so he retires Debt he Owes his Investors at a deep Discount.

Basically he agreed to pay them 1$ but is only giving them .25 cents. Or today 10 cents.

If you didn't earn anything before conversion and in 8.4 years you are saying there would be 0% profit.

You eyes are closed to the potential to perpetually earn from 1% /month payments that occur after 8.4 years. You left out the potential for NP to call all bonds within 8.5 years, which gives your principle back plus any payments made.

I know you want others to believe that payments will never happen.

... synonymous to exchange rate for whatever context it is used.



I understand you want "face value" to mean something out of context.




If you sell your bonds at market rate, you get that face value equal to the trade. This is not hard to understand.

NP suggests not to sell them below what they are worth. All perpetual bonds are eventually worth practically nothing due to deflation.

No you dont understand at all.

Ive come to the conclusion we are unable to converse - there must be a language barrier. I only Read and write English.

okay you either have not been around to see this happen
are in fact nick himself
or an investor who is either grasping at straws cause you have like 2 million of these bits of virtual paper and are in complete denial

or are just farting around and messing with people using dictionary definitions (like nik did for many things which got him into a bad spot) to deny what he actualy said

I'm pretty sure at this point your nick due to the statements that "i want everyone to believe that they wont pay out"

Anyhow it was fun if your not one of the above i'm sorry in advance but i ahve at this point no other explanation left to explain your continued flogging of wiki definitions to explain this or any other one I can think of.

In conclusion Ginko bonds are worthless until such a time as its proven otherwise and the money is gone unless proven otherwise.

ciao

p.s. what i would have liked to have seen is this guy return all the money they have held captive in total as of yesterday.. if not sooner

This isnt exactly what hes doing though it might end up being the practical reality.

The idea is he will pay this rate of interest and eventually (1 to 2 years he says) offer full price to buy back the bonds.

SO , if it actually ever happend you would get your money back PLUS the interest of that 1 or 2 years.

He complained that he could do it sooner if he could buy the bonds for less than 1$ , thats obvious becuase if he owes 150 million and can somehow reduce that to only owing 75 million its easier to pay back.

The thing is if you beleive he can come up with that money in 1 or 2 years .. if he doesnt then it becomes like you said , just interest on money youll never get back.

If you NEVER get your principle back, but somehow get paid interest for 8.4 years ... you would eventually break even , since the accrued Interest at that point would equal the money originally invested.

This is one of those "i will believe it when I see it" type things

What I believe is that he has just given them this little passifier and if he manages to pull something off then he might give them their principle back and not pay any interest, but I doubt it. He has only talked of paying off debts not paying interest really. I haven't looked to see if he even has an actualy "bank" up anywhere anymore. The website is gone to and this was a key communication tool. Looks like he has gone out of business to me.

/shrug

I think he will allow the market price of the bonds to continue to drop without doing anything to forestall it (such as disclosure of the bulk of the investments, etc)

Until such time he can use a coven of alts to buy up bonds at the penies on the dollar rate, thus retirig a LOT of his debt.

This will reduce the dividends he needs to come up with.

Then he will bite the bullet and make the payment.

He will then repeat the cycle till the amount of "Debt" - As in the non-discounted hold outs - is substantially below the value of his SL holdings.

When this happens he will sell off the SL holdings and Pay everyone off.

What about the bulk of the money? The non SL holdings? Well he will keep that of course. If he hasnt spent it already.