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Initial Public Offering of Kavai Conglomerate

Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-16-2006 20:32
Hey everyone. I am about to take my company public via the New World Stock Exchange. We are a real estate development firm that operates the 3 Sunset Islands, as well as the North Paris casino we acquired from GinkoTec.

We are looking to raise funds to expand our profitable rental operations, and we are looking for investors to buy into the IPO.

If you are interested in such an undertaking, please contact me, Kavai Onizuka, inworld via IM, and include your email and I will send you a detailed prospectus of the firm for review.

If you have any questions, don't hesistate to ask!

K. Onizuka, Chairman and CIO, KCG
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Chrischun Fassbinder
k-rad!
Join date: 19 Feb 2005
Posts: 154
06-17-2006 00:19
What is this New World Stock Exchange you speak of? While I've been slacking tracking recent SL developments I can't find any mention of such a service by that name when searching the forums.
Dana Bergson
Registered User
Join date: 14 Oct 2005
Posts: 561
06-17-2006 00:52
Hi Kavai,

I might be interested. Do you have a link available to your prospectus? Or, if it ain't "public", you can reach me at [email]dana.bergon@googlemail.com[/email]. Thank you!

I like to second Crischun's question: "What is the New World Stock Exchange"?
Kyrah Abattoir
cruelty delight
Join date: 4 Jun 2004
Posts: 2,786
06-17-2006 05:53
hi kavai, how often do you change the "title of nobility" of your "company" ?
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kerunix Flan
Registered User
Join date: 3 Sep 2005
Posts: 393
06-17-2006 05:55
From: Kyrah Abattoir
hi kavai, how often do you change the "title of nobility" of your "company" ?


héhéhé :D
Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-17-2006 06:14
From: Kyrah Abattoir
hi kavai, how often do you change the "title of nobility" of your "company" ?


Don't quite follow that question.

As for the New World Stock Exchange, it is a new exchange entity that Jonathan Barbara founded, much like Shaun Altman's Metaverse Stock Exchange.
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Hunter Parks
Mr. Morgan
Join date: 16 Sep 2004
Posts: 53
06-17-2006 07:41
From: Kavai Onizuka
Hey everyone. I am about to take my company public via the New World Stock Exchange. We are a real estate development firm that operates the 3 Sunset Islands, as well as the North Paris casino we acquired from GinkoTec.

We are looking to raise funds to expand our profitable rental operations, and we are looking for investors to buy into the IPO.



Hmmmm....If you are profitable, why go public and introduce all those obstacles?

-Hunter
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"It's not who dies with the most toys, it's who dies with the most friends!"
Hunter Parks
Mr. Morgan
Join date: 16 Sep 2004
Posts: 53
06-17-2006 07:44
From: Kavai Onizuka

K. Onizuka, Chairman and CIO, KCG


Is that supposed to be CEO? I can't figure out why you would need a CIO.

-Hunter
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Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-17-2006 07:56
From: Hunter Parks
Hmmmm....If you are profitable, why go public and introduce all those obstacles?

-Hunter



We anticipate massive expansion in the near future, I am not taking about expanding 1 sim every 3-4 months, but 1 new sim every week given we fill them up. My resources can only take me so far, I will definitely need new capital to expand. Also, my CEO, Clinton Oddfellow, takes care of the operations, while I just find new investment opportunities, thats where my CIO title comes from.
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Anna Bobbysocks
Registered User
Join date: 29 Jun 2005
Posts: 373
06-17-2006 09:01
Sounds pretty exciting, Kavai, I'm looking to invest.
Dana Bergson
Registered User
Join date: 14 Oct 2005
Posts: 561
06-17-2006 09:48
Kavai, I got your prospectus. TYVM for that!

But tell me: wouldn't it make sense to present some details of your business model to potential investors? Your current operations have a net worth of 2.5 Million L$, you want to raise 10 Million in cash with projected earnings of around 5 Million L$ in the next fiscal year. You are promising a dividend of 25%.

I am trusting person. But when someone tells me about a return on capital of 25% I tend to be interested in details; like target groups, competitors, market structure, cost structure, cash flow, and so on

Further interesting details might be:
- What is the planned shareholder structure?
- How many shares will the management keep?
...

You are announcing to focus on the land market. So: What are your projections on the development of the land market in SL. How will prices develop? Demand? What are the major risks? What will happen to your business plan, if Linden Lab changes the pricing for mainland? For private sims?


Important for any IPO especially in SL would be:
- What securities and assertions are you offering to make sure that the management doesn't take the money and run?
...

Of further interest might be, because you are announcing to be listed on a new stock exchange:
- When can we expect some more information on the New World Stock Exchange?


Sorry, I don't want to sound distrustful, but these, and more, are all question which any prospectus worthy of the name should answer. :)
Iron Perth
Registered User
Join date: 9 Mar 2005
Posts: 802
06-17-2006 12:47
Actually, a prospectus usually just focuses on its track record (past and present) to show that you are investing in someone who has a history of success.
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Iron Perth
Registered User
Join date: 9 Mar 2005
Posts: 802
06-17-2006 12:50
From: someone

But when someone tells me about a return on capital of 25%


Given the rate of L$ inflation, a annual return on capital of 25% isn't particularly challenging. In fact, by my calculations, the L$ has an annual inflation rate of over 30%, so he would actually have to lose money in order to hit that dividend.
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Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-17-2006 20:03
From: Dana Bergson
Kavai, I got your prospectus. TYVM for that!

But tell me: wouldn't it make sense to present some details of your business model to potential investors? Your current operations have a net worth of 2.5 Million L$, you want to raise 10 Million in cash with projected earnings of around 5 Million L$ in the next fiscal year. You are promising a dividend of 25%.


We are going to offer 800,000 shares at 10-11 L$ per share, so we are planning to raise ~8 mil to 8.5 mil to be exact.

From: Dana Bergson
I am trusting person. But when someone tells me about a return on capital of 25% I tend to be interested in details; like target groups, competitors, market structure, cost structure, cash flow, and so on

Further interesting details might be:
- What is the planned shareholder structure?
- How many shares will the management keep?
...


I realize that it might sounds like a huge return, our management has actually been able to achieve that from quarter to quarter in the past. We have a solid mode of operation that allow us to maintain a high profit margin.

Our expansion will focus on developing residential and commercial property to both the high end user base as well as the common SLers. We have not encounted any serious competition from any of our competitors so far, and our economic moat is large enough for us to adjust ourseves to become more competitive. We plan to target the high end user base in the future due to the fact that our expertise has been in developing quality residential developments.

We are also able to run our operations at minimal costs. We only maintain tier on our businesses, and we ourselves commit to develop the sims ourselves. Even after the firm goes public, compensation to staff and executives will be balanced on preformance rather than outright setting a salary. We also keep an eye on our cashflow, and from month to month we have tried to maintain a positive cashflow.

From: Dana Bergson
You are announcing to focus on the land market. So: What are your projections on the development of the land market in SL. How will prices develop? Demand? What are the major risks? What will happen to your business plan, if Linden Lab changes the pricing for mainland? For private sims?


We believe that continued growth of the Second Life user base will provide constant demand pressure on the land market. Our current pricing mode has allowed us to achieve full occupancy in our rental developments and I believe we can extend that to all other developments. This business is of course not without risks, as the supply demand structure change with the user base, our firm will have to adapt with any threats. The volitility of LL is the only concern we have within management.

However, as I mentioned, we are not just a real estate development firm. We have several other businesses from event centers to casinos to currency exchanges to a banking branch that would allow us to outride any major volitility in the real estate development. Currently these business builds roughly 45-55% of our quarterly revenues, and we look to maintain it at ~30% even post-expansion.


From: Dana Bergson
Important for any IPO especially in SL would be:
- What securities and assertions are you offering to make sure that the management doesn't take the money and run?


New World Stock Exchange will have measures to give our investors a peace of mind. On top of that, our history within Second Life is lengthy and we do have a reputation in the metaverse. We would like to maintain that because the possibility of doing something great in SL is still open.

Management will be holding Almost 35% of the public float, confirmed by NWSE.

From: Dana Bergson
Of further interest might be, because you are announcing to be listed on a new stock exchange:
- When can we expect some more information on the New World Stock Exchange?


I will contact Jonathan to see if he can provide more information for you on that.

From: Dana Bergson
Sorry, I don't want to sound distrustful, but these, and more, are all question which any prospectus worthy of the name should answer. :)


Please do not hesistate on asking more questions. We would like to provide our investors with as much info as possible to make this investment opportunity a win-win scenario for all.

K. Onizuka
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Iron Perth
Registered User
Join date: 9 Mar 2005
Posts: 802
06-17-2006 20:27
From: someone

I realize that it might sounds like a huge return



When you say 25% dividend, does that mean you're going to pay out 7500 USD or 2.5M L$?

If it's the former, yes that's a huge return. If it's the latter, I am pretty sure I could do that by just stuffing it in a simple bank account.
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Jonathan Barbara
Registered User
Join date: 9 Apr 2006
Posts: 17
06-17-2006 20:29
Hey all -

It looks like I need to respond to this post.

Kavai - could you please edit your post at some point and use my in-game name instead of my real name? It's not that large a problem, but I'd appreciate it!

On a separate note:

The NWSE has recently been created in order to help grow the SL economy - especially the financial sector.
Something extremely important to note: The NWSE founders/directors (there are three of us, Alondria LeFay, Overld Spengler, and myself.) will have absolutely no financial interest in any of the stocks listed on the exchange. This means that if stocks skyrocket we will not benefit any more or less than if stocks plunge. Our only interest is creating a liquid market. The reason this is so important is because there will be absolutely no conflicts of interest. If anyone would like more details about that they are more than welcome to IM me in game.

In response to the IPO, NWSE is not involved in the underwriting - we are going to house all the information that needs to be made public (it will all be available on nwseonline.com as soon as the website is up), as well as provide the trading platform. You will only be able to trade while in game (this is to protect us - one of my colleagues IRL was an attorney for the SEC - he has advised me as to how I can go about this exchange without breaking any laws).

Alright, there's a little info, anyway. Again, please feel free to contact me in game if you would like to talk more about the exchange. We're looking at a rollout date of about the end of June.

-jb

EDIT: All transactions (including dividends) will be in $L. All businesses must receive 100% of their operating revenue in SL (again, these are legality issues), and all transactions involving the NWSE are in $L.
Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-17-2006 23:26
From: Iron Perth
When you say 25% dividend, does that mean you're going to pay out 7500 USD or 2.5M L$?

If it's the former, yes that's a huge return. If it's the latter, I am pretty sure I could do that by just stuffing it in a simple bank account.


We are looking to pay out the 25% dividends in L$. All our business is handled inworld to reduce any problems with RL legislation, as Jonathan mentioned.
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Iron Perth
Registered User
Join date: 9 Mar 2005
Posts: 802
06-18-2006 19:07
How do you pay tier if you do not convert the L$ into USD?
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Kavai Onizuka
Spudzuka Properties
Join date: 23 May 2004
Posts: 452
06-18-2006 20:24
We just treat that expense in L$. My point is that this entire investment will be 100% based within the Second Life economy, we are not planning to take any of the money out and investing in any real life ventures.
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