What are Ginko Bonds worth? - 2

For pete's sake.

If they allow out of market transactions, he can easily cancel the debt at the prescribed 1L price. He doesn't have to wait for the market if he doesn't want to. This is another non-issue that you are hung up on.

And I wasn't discussing the specifics of a transfer when referring to rl physical transfers of certificates - just saying it could be done and some corresponding functionality would be nice if it didn't exist. Another non-issue, moving on.

I have already stated my opinion as to the worth: toilet paper. A partial liquidation would go a good way to changing my feelings, but hey... it doesn't matter, ultimately, because I have no stake invested and am not going to hedge my bets against being caught with the bag of tp if Ginko folded for good.

I agree.

If Nick was willing to Buy some Bonds back at 1L each, I have no Doubt arraingments would be made to accomidate him.

The market controls that value for now until cancelled. He can't control everybody to buy or sell at a certain value. What they buy and sell at is the face value at that time (~10 cents). If he cancels it, then he says he'll do it at a face value of L$1 (he'll exchange each bond of L$1). He has not cancelled any of them. He has not set a date to cancel them. At this time, they are not worth that L$1 face value that you say he decides.

Interest/dividends are set to be 1 cent per bond per month paid quarterly. That is the only implicit L$1 face value that exists, but you have stated to my "fair" question that it is only "interest." If you never sell your bonds and he cancels them, then it would only be interest, right. Coincidently, that is at about 1/4 of the interest rate that depositers originally got paid.

Ginko paid ~%40 interest per year and that has been been converted to ~%10 per year. The original GPB investors, however, still get the ~%40 per year.

If you are not someone who manually withdrew your funds from Ginko ATM and bought GPBs with those funds, you automatically got your interest payments reduced to 1/4 of what it was by the conversion.

That wouldn't be fair to those that don't get their bonds bought back.

I've realized this is what you'll say no matter what...



hung up on... what... another point your trying to re-prove that has already been stated... yep... pounding again...

Whatever, Dzonatas... if it makes you feel better, sure....keep telling yourself these things... and then contradicting yourself...

No the Face value is 1$L PERIOD. As Ginko has defined the Bond and WSE has managed the brokering, the Face value is 1L. OF course the market value isnt 1$L I never said it was. Of course it isnt trading for 1L I never said it was.

It doesnt change the fact that it is a 1L$ ginko bond. Which you can buy for a Linden Dime.

Your inability to get this distinction is a source or perpetual amazement to me.

None of this Ginko Situation is Fair -

Except to Ginko.

For them its beyond fair - its hedonistically preferential.

Of course the original investors get 40% a year - they Bought out somone elses account balance at 25 cents on the dollar.

Thats what the original Bond Issue was. The fact they could only get 25 dollars for a 100L Ginko Bond is telling.

Thos Bonds didnt have a face value of 25L BTW - it was 100L , 25L was the market price for the bond.

Just replace "face value" with "cancellation value" in that sense you have used it, and you'll be fine. Otherwise, you carry the same screw-up or lie that NP has made.

If the bond was a peice of paper it would say 1L on it.

thats its face value. No where anywhere is a guarantee some value other than what the issuer assigns it.

The face value on the US dollar bill is 1 US dollar. It might be worth 100 Japanese Yen, It might be worth 120. It doesnt mean the number on the front changes.

If the US economy were to take a Huge nosedive the Dollar would lose tons of value. But they wouldnt go out with a sharpie marker and change all the ones to .25s

You are equating Face value with the Trading value. This is not always the case. You just think it is becuase you pulled some dictionary out. Get over it.

Nick's lie and screw up was not in the issuing of the Bonds.

The Bonds literally are just IOUs

It was a rotten thing to do to convert people's debts to these crummy bonds, but it wasnt where he screwed up, nor lied.

---------------------

Nick's screw up was that he didnt responsibly invest the money, and that he didnt adjust the interest paid at the bank to equal the actual returns he was making on the money.

His additional screw up was to pay rather substantial sums of US dollars to people who were working for him, and to take out a similiar amount himself , when the investments had not even begun to realize any potential.

Its Highly likely his screw up includes the fact some of his investments lost money - None of which translated into lower interest rates paid to depositors.

His Parallel Screw Up - and the one that in the Real world would get him arrested was the fact that while all this was going on he was keeping his machine running by using new depositors to pay off the old ones.

In Other words hed created a functioning Ponzi Scheme.


his LIES were in how he covered all this up from everyone.

He is likely lying about making good on these IOUs but only time will tell.

Colette, there is no paper printed with a L$1 value on it for this bond. It doesn't exist. Being that it is a perpetual bond, it will never exist.

You are relating a "face" with a physical surface. This is a virtual world, and the only physical surface you are going to see right now is the simulated stock ticker with an entry for GPB with a number ~10 cents. That is the current face value shown on your screen when it is in view.

Since a bond is a DEBT security, the bond will have printed on it the .... DEBT! ...which won't get paid back on any timetable.

Let me know when you find one for GPB. I like to see it.

Sure, when I'm done wiping my ass with it.

No.

The face value is 1$L , this is what GINKO is saying the Bond is worth. Its what they always said it was worth. Becuase the 1L represents 1L of their DEBT.

No one would buy them for 1$L though. They will only buy them for much less. Becuase they dont beleive Ginko has the assets to cover their debts.

Im not stuck on any piece of paper its a METAPHOR.


------------------------------------------

You are over-complicating this bond stuff

the Ginko Bonds are nothing more than Nick's IOU.

The meaning of these bonds is really basic, the bond "says"

- I owe you 1 Linden dollar.
- I dont know when I can pay you that 1 Linden dollar.
- Until I can pay the dollar off Ill pay you 1 cent a month.

--------------------------------------------

Now you can Sell your "Nick Says he owes me 1 dollar" bond to other people. For whatever they are willing to buy it for. Right now about 10 cents.

But its still a bond that says "Nick says he owes me 1 dollar" and if you sell it, he will owe someone else that dollar.

Nick and Ginko call that the face Value of the bond. Its a legitamate use of the term Face value. Its not the first time its been used in this manner.

So:
Its Market Value is around 10 cents.
Its Face value is 1 dollar.
You may never get the Dollar back.
Its supposed pay you 3 cents in a couple months.

*Wilhelm Raises his hand*

excuse me

umm

I would just like to point out that there are now almost 200 individual posts arguing what face value is

*Wilhelm wanders off to look at something shiny in the corner*

Nick isn't TRYING to control the market value; he wishes it were higher, supposedly. As far as Nick is concerned, when he calls the bonds, the holder, whoever it is, gets 1L per bond. Market value - which, ***to Joe Blow*** is value at the time of purchase - is immaterial to Nick. Nick isn't going to pay .26, .098, or whatever. He's paying a full Linden. So the value of that bond to the Joe Blow depends on how you look at it. You are looking at it from an acquisition standpoint, and we are looking at it from a redemption standpoint, as that is the benchmark for the dividends and the amount certain that will be rendered upon surrender of the bond. Whenever that may be. If Joe Blow buys the bond for .30 and happens to be holding it when Nick calls it, what is the bond worth? hmmmm....

I think we should all put this into perspective.

Financial services are not currently regulated within Second Life. I believe they should be but that is an issue for another thread.

Therefore any real life comparisons between "bond" "debenture" "undated loan stock" or other financial first life vehicles are of passing interest only.

What we have in simple terms here is:

An avatar set up a second life business around two years ago. He made an offer to all that were interested to the effect that they gave him their Linden dollars he would reward them via interest on those dollars

The business grew and grew. At its height it was believed deposits plus accrued interest exceeded three quarters of a million US dollars.

A little while ago the avatar arbitrarily changed the nature of the deal. Instead of emulating a virtual bank via cash machine terminals and a dedicated web site, he made arrangements for the debt to be traded on what could be called a virtual stock exchange.

That means the debt repayment in full (which was the former responsibility of the avatar) was transferred to the whole of participating Second Life residents. The original avatar has indicated he may continue to pay interest at a set rate on the "Par Value" of the debt. There is no set date where the original avatar will pay of the value of the debt at par.

Therefore debt repayment (at what ever amount) is now subject to the virtual laws of supply and demand. No first or Second Life assets have been declared to enable anyone to correctly value this debt at this time

Hope that is clear.

Oh yes one more point.....the avatar concerned has indicated he may live in Brazil, not Nigeria.

Well, having read this thread entirely I think Ginko's a closet bondage player.

*raise hand impatiently*

I Know!

ONE LINDEN!!


yay! I knew those economics classes would pay off.

IF Nick actually officially pays off the bonds they are worth one Linden Each -

----------------------------
Thats a Big IF of course, Huge IF. Plan a Ski trip to the underworld IF. Peace in the Middle East is old hat IF. Rush Limbaugh and Al Franken have a secret affair IF. Second life stops being laggy IF.

No seriously, I have trouble wrapping my head around Ginko.

//Qie envisions the leather mask and green eyeshade--and is strangely unaroused. Quite so. But I'm compelled to make the point again: at the time the deal changed, it wasn't simply a recasting of deposits into bonds of like value; rather, it was theft of 3/4 of the value of the deposits. Both the fair market value and the offer price of the bonds were L$0.25 per L$1 deposit converted.

If the bonds obligated him to pay off the L$1 call price at a date certain, then the offense (so far) would have been limited to the arbitrary conversion itself--hardly what a depositor should expect of a "bank." It still would have been a taking, though, inasmuch as the principle was no longer available at full value on demand, as in a bank, but subject to market demand--which has not been generous, as becomes more apparent every day as the bond price continues to decline to a fraction of even that offer price.

Now we wait for the next shoe to drop: will Ginko pay the dividend, already slashed just by virtue of the devaluation of the deposits? If not, it's yet another theft.

Whether these crimes are "real" or "virtual" would be up to a court to decide, but the deposits were worth hundreds of thousands of US$s. Regardless of one's perspective, making off with 3/4 of that makes Ginko Guy a real life crook, whether or not a criminal prosecution would be successful.

Well he does do the bond holders a diservice by not making any attempt to raise that Market Value of the Bond.

He could do so simply by revealing all of Ginko's assets.