Cyberland and Firechick Merge!

Actually, it's quite funny, as it was a reference to the run on the bank that Ginko had a few weeks ago that was publicized in the General forum. Do you know about their temporary difficulties or Ginko in general? We have one of their ATMs in our bank in Neualtenburg, so among other things, I can follow their rate of return.

By the way, slander is spoken and libel is written.

That's correct, Neualtenburg is the first publicly owned and traded company.

We are publicly owned and traded in that we are a government-owned corporation, where ownership is open to anyone that has the money and inclination to buy shares in the company. Because our government is owned by our public, this makes us publicly owned. This is by definition. (I insist you follow the Wikipedia link and study the definition until your desire to retort is quenched.)

As an aside, our bonds are convertible, meaning one can exchange them at their par value for shares of land in the nonprofit.

This is incorrect. We are in fact public, as we are a corporation that is open to anyone that has the money and inclination to buy shares in or bonds from the company. Right now you could buy either or both!

It suits you ideologically to call them apples and oranges, so you can maintain your disputed claim that you are the first business in SL to go public. However, a market is a market and a security is a security. We are a business, our shares and convertible bonds are publicly traded, and we release detailed financials monthly. It's as real as the Dutch East India Company.

~Ulrika~

Ok, I'm happy to hear that you are not attacking your investment banking rival but only me. Like I said, I was open to being proven wrong on that point.



Ok, this seems to be getting more random and silly. In fact, I feel like this post is another spin in a series of spins, to use this merger thread for the purpose of advertising your bonds and your... society? First you were a publicly traded company. Then, you were issuing bonds rather than selling equity (shares) on an open market. Now, you're a goverment which you indicate may also be selling equity (shares) of it's.. goverment owned company(?)... on an open market. I'm getting dizzy Ulrika. Yet this seems like a fun spin, so I will attempt to follow your logic...

So what you are saying is that you have declared your sim to be.. governed.. and declared yourself to be.. what.. queen of this rogue nation? And by this virtue your sim is.. publicly owned by it's.. citizens?

Your citizens don't have private land ownership rights? Scary goverment. Farther, you can either be a governent OR a company. A government is a governing body, not a corporate entity, and you don't get it both ways. What's your pleasure?



So now you are a company again? Like I said you can't have it both ways. You either get to be a rogue nation OR a corporate entity existing under the governing body that LL provides for the rest of the world, such as it is.

Also, now there are shares in addition to bonds? My earlier questions about an open market for equity in a company, which you answered with a spin-off into the subject of bonds, and when I replied to that another spin-off into the subject of goverment, still exist. I still welcome direct yes/no answers as to whether you are selling bonds (taking out loans) or selling equity (shares) on an open public market, or selling land, or renting land to.. citizens(?), or all of the above. If you're selling equity (shares), where can I buy and sell them on an open market without your approval or oversight?



A security is a security, but as you've correctly pointed out for the user base, a bond is not equity, it's debt. So why not dispense with the spin-offs and just tell me what it is you're offering? The Cyberland merger thread now seems to have been hijacked as your personal stage anyhow.

Are you taking out loans, selling off equity, selling off land, or all three? If there is in fact an OPEN MARKET to buy and sell EQUITY (shares) in a COMPANY (and not a governing body) without your approval or oversight (publicly), stop posting your elaborate spins and just post a link to it.

Ulrika,

Sorry to post again before you reply, but I've taken the time to look at your website, and and overview has this to say about your N-Berg:



non-profit cooperative (private, controlled)
group ownership (private, controlled)

I can't find a mention anywhere on your site of a corporate entity, an open and accessable market providing equity trades in that corporate entity, etc. Would you care to comment?

i am also trying to follow ulrika's descriptions.

Most people think of corporate ownership as refering to the equity, not debt (putting aside the bondholders' appearance of ownership with restrictive rights and covenants, and first dibs in case of liquidation).

You seem to be saying that Neualt. (which I have never looked into in great detail, but always seemed like an interesting experiment) has BOTH bond holders and equity holders, and that anyone can buy into either?

And I also agree that there is a difference between saying something is publicly owned (meaning anyone can buy in) and publicly traded. To be considered publicly traded in this day and age, you should have a secondary market somewhere with open disclosure of pricing (and volume) information, where people can buy/sell your bonds or equity/stock.

Someone who owns stock in a US private company can arrange to sell their stock to someone else or back to the company (depending on the restrictions on that stock)... but that doesn't make it publicly traded.


and to whoever asked the question earlier -- people often use the term arbitrage when talking about the ability to profit based on a price spread of some kind -- the term does get bandied about a bit loosely sometimes. In this case, I believe they are referring to the price-per-meter difference between someone who has a $195 per month tier and someone who only, say, pays $8 for 1024m2

They sell stuff for tinies in Neualtenberg.

Good luck with the biz Wu and Shaun !

I like tinies and concerning the topic at hand everyone can come to Fate Gardens and buy trees because it's on land and ahem yes well moving on it's amazing to see an IPO, a vastly extended distribution of shares, and a merger occur in such rapid succession.

Things really do pan out at an accelerated rate in Second Life. Does that make a stock market more lucrative and more risky at the same time?

lol khamon, you crack me up... how come you never came to get my free tree shadows?


and yeah, you are probably right... it's what you see with OTC smallcap stocks -- thinly traded, inexpensive on a per share basis -- you see a lot of volatility, which means there may be greater potential upside, and but there is also much greater risk as well (those two things tend to go hand in hand). Unfortunately, you often see more attempts at market manipulation as well (because it's easy for a rumor to swing a penny stock, not so easy for it to swing, say, G.E.)

not an area the casual investor should play unless they aware that their invested capital is at serious risk and they are prepared to walk away with nothing.

Because I gave them to him.

I looked over your site/company and your "publicly" owned company with its "shares" and "dividends" looks more like a private company with bonds and interest. You don't have a company charter as to the rules of the company, you have no financial information available, and looks to me your "shareholders" have no voting powers therefore no control. Even if you say they have control, I highly doubt if 51% of the shareholders voted you out as management that you would actually leave because this was your idea and your company that you started. Labelling something differently doesn't change its substance. Would definately help having more information on your company and its financials. I find it very interesting seeing corporations starting to pop up in sl and hope it continues and hope you have success as one of the first.

My understanding is that Shaun owns 51% of the shares, so unless he votes himself out, this can't happen.

although for the record, having a single majority shareholder doesn't disqualify a company from being considered "public"

hmm... it probably makes sense to add insider/officer stock activity to your disclosure -- it's an important factor in RL publicly traded companies, to be able to see if a major holder/director/senior executive is buying or selling stock.

Perhaps naming some officers of Cyberland would help? The officers could be large shareholders who have a vested interest in seeing the company succeed and a vested interest in protecting their investment.

Wu owes me half!

Very true Caroline! You go girl!

I second this notion.

My reply to clarify the confusion is coming shortly. I have guests coming to town in a couple of days so I'm running around today getting some errands done. I'm actually very interested in this conversation and I'm looking forward to posting as soon as possible.

~Ulrika~

If you like. I've also had a chance to review the financials which you make public on your website. Your Balance Sheet, and also your Income and Expenses. In the financial data which you make public, I can find reference to bonds (a debt), as well as land (a commodity). I cannot find anything in these financial documents which suggests that a corporation may exist as anything other than a mixing of words on your website.

There seems to be no open equity market where shares of a public corporation are traded. Farther, there are no public shares of a corporation mentioned in your financials. If this corporation and it's shares exist, where do you hide them? This doesn't fit my definition of a publicly owned and traded company.

As an interesting aside, I noticed that you ran a deficit of L$47,685 last month, and year-to-date you seem to be running a deficit of L$103,392. I applaud your honesty in these reports with much enthusiasm. If ventures like ours are to exist in SL, we need to be able to stand up and be completely honest about the good, the bad and the ugly. Clearly you are a person who is able to do this.

Taking the financial statments into consideration though, I do have some questions as a potential bond purchaser. (I WAS serious when I asked here and also left an in-world offline IM, inquiring as to where to learn about and purchase bonds. ) Given the fact that in almost 7 months, (a long time in SL terms) you're unable to show a profit, and are actually showing a deficit of L$103,392, what makes you confident that you'll be able to pay off your current loans of L$288,025?

Will you be using personal assets to do so in the event that your experiment continues to not be a financial success? Is there some security offered with these bonds? I guess what I'm asking is, at this point, what makes your bonds a good buy and why are you still comfortable with issuing them?

I would ask the financial questions in-world, but here seems to be a better place to get a response. Sorry if your IMs were capped and you missed mine or something.

Thank you for looking. You seem to be confused about the differences between stock and bonds. Ulrika made an excellent post on the topic above, and I thought that the information pages on the exchange website spelled it out pretty clearly as well. If you're considering investing in Cyberland stock please take the time to read and understand both. You can also IM me in-world if you have any questions and I'll be happy to talk with you.

These shares are not debt. They represent equity in the company, and aside from any shares which may be purchased as part of the company's stock offering are to be bought and sold on an open market. Dividends are not interest, and are only paid because I say so. Dividends are based solely on gross revenue, and the percentage may go up or down (preferably up ) at any time. They are not an express or implied gaurantee of any type of return.

All shares do carry a liquidation value on par with Cyberland's assets. What this means on my exchange is that, in the event of a bankruptcy situation they will be redeemed for either their equivelant value in land (which there would likely be a LOT of in the event of a bankruptcy), or cash at face value (which there would likely be comparatively less of in the event of a bankruptcy). It would occur in that order and on a first-come-first-serve basis. In other words, while a bankruptcy definately wouldn't be pretty, it wouldn't be a total wipe-out for share holders either.

This asset liquidation in the event of a bankruptcy is the ONLY gaurantee offered with regard to Cyberland stock. Again, the shares represent equity. Please do not purchase Cyberland stock, or stock in any company which may be listed on the exchange in the future, with ANY illusions that these shares represent a debt to you.



Correct. As is clearly stated in the press release covering the secondary offer, no shares being offered carry any voting rights, and such a vote as you've mentioned above would not occur in any circumstance. The shares represent equity only. There is one voting share, owned by me. If this makes you uncomforable and you feel that you require a lot of day to day (or even higher level) control over how the company is managed, you should not purchase Cyberland stock. A better alternative would be to start a competing private investment land firm, of which you will be in full control.



I guess this goes without saying but, see above.



A revenue report is due out on or about the 12th of August. I'm sorry but I don't have the time or frankly the inclination to put out revenue reports at any shorter interval than monthly. Again if you're interested in investing in Second Life land but require more than a broad overview in real-time, a private firm is a better alternative.



Thank you. So far things are progressing not only better, but much faster than I expected for the first couple of months. I'm thrilled by what we've accomplished in such a short time!

Im not confused at all. Thx for clarifying about the stocks having no voting powers which only suggests more that your company is not publicly owned.

So lets run through this logic quickly and hopefully you agree. For someone to have ownership over something they must have some sort of control over that object. Your stockholders have no voting rights and therefore have absolutely no control. Therefore with no control, you can't say that they have ownership when clearly they have none. Would you not agree with that logic?

I'll agree with your stocks being equity because you are not required to make any sort of payments back to the investors. But just because you have investors does not make your company public.

Like I said before calling your company public when its private doesn't doesn't magically change it into a public company.

Make a company charter, provide reliable in depth financial information on the company, and issue voting shares and you have yourself a public company, otherwise its private.

But isn't this *public* or *private all just a matter of labeling?

Unless you plan to outst the company management, this voting right does not matter in the firm. Investors are simply looking for either a rise in stock price or returns through dividends.

When we buy a share of the company, we are just paying the company money to expand even more. Investors are simply taking a gamble on whether the land market will improve in the future and whether Cyberland will outpreform the market.

However, the lack of clarity with the financial results may scare people away, but then again, this really isn't that *public* of a firm, so, it is up to the CEO to decide whether to release info. Before I see how the firm is doing, I am cautious about investing, but the whole concept seems to be VERY well planned and executed.

*cough* ponzi *cough*

[EDIT: looks like Smiley's troll was removed, as it should be. Well done moderators!]



I would disagree with this. Companies can have multiple classes of stock. You can indeed buy non-voting, non-controlling ownership in a company. You are buying a share of the liquidation returns in event of bankruptcy or sale (or, in the event of a stock-for-stock merger, you will see your stock converted to new stock). In the case of a public company, you can freely sell your shares on a market. Non-voting shares would trade at a discount set by the market, since obviously the purchaser can only participate as a passive observer.



no, my understanding at a glance is that shaun has "listed" the company on a web-based market where people can buy and sell shares -- THAT is what makes it "public". The key here is the ability to freely buy and sell shares on an open secondary market.



erroneous conclusion IMO, but the spirit of what you write is correct. Rules for public companies exist for a reason - to protect investors and prevent abuse. Companies that go virtually "public" (allowing anyone to buy and sell shares on an open secondary market), in SL should follow the spirit of what RL public companies have to go through:
- an offering document that spells out track record, goals, and risks;
- quarterly financial statements at a minimum (in RL, there are a lot of countries that don't require this, but they really should), and a once-a-year 10K-like document
- disclosure of buying/selling activity of directors and officers;
- a board of directors, even if it is toothless b/c a person(s) is a controlling owner

I could come up with more but this is too long already lol. I guess there is no practical way of doing an audit right now lol.


To speak a bit more on voting:
In this case, Shaun could always set it up that he could put any issue to a public vote any time he wants to, and given that he owns more than 50% of the company, everyone else's vote would be meaningless anyway. And yes, you can be a public company when the public owns less than 50%.

Keep in mind that when you DO get to vote in a public company, you usually only get to vote on who gets to be on the board of directors -- your representatives, so to speak. There are exceptions, such as an acquisition/merger that would represent a significant event, or perhaps some sort of highly-dilutive activity that meets a preset threshhold.


NOTE: i have no affiliation with Cyberland, nor am I an owner of the stock, though I am curious enough about what Shaun is doing that I plan to look into it further.

This seems like splitting hairs, but I don't think cyberland shouldn't be considered a publicly owned company because only one person has ownership. I disapprove the fact the owner is falsely labelling it as the first public company when it isn't even a public company. Other then that I don't care and hope it success. Im not attacking it or trying to bring it down in anyway.

I do believe that a company has to have at least one class of common stock with voting rights. For it to be public, more then one person would have to have owernship. One share with voting rights would not constitute a "public" company because only one person owns it. So how is this company public when there is absolutely no public ownership?

Just because shares are being sold between people wouldn't justify calling a company public. Anything that has a market can be traded.

How was my conclusion erroneous? I stated what would have to happen to satisfy my requirements to consider a company as public.

ok, let's say that a company exists where there are two people who both own 50% of voting stock, and then they offer a new class of non-voting shares to the public who buys and sells those shares on a public exchange?

I don't see how adding that second owner really changes the nature of the animal here.

We are arguing over applying an RL word to a virtual creation that does not have the same hurdles and check-boxes to go through before it can be called "public". I think it is interesting that you are focused on ownership rights while I am focused on the marketplace. Here in SL, I don't think a company having one, or a thousand, owners makes it "public". Nor does having one owner with major voting rights, and a thousand owners with curtailed voting rights, mean that it cannot be considered "public".

I think what makes it public is that has released some sort of security to the public which can then be actively traded on an open exchange, which then sets a moving price for that security. The price is not, as in the case of a private company doing a venture capital round or issuing stock options, set by the board of directors (i.e. the company itself). Nor is it a one-off transaction with one owner selling his stake to someone else at a negotiated price (and under whatever restrictions apply).

No, it is a open exchange with open buying and selling activity which sets the price of the stock on an ongoing basis (and ideally where people can see the bid/ask spread, and the historical performance of the price).


(naturally you can apply a big "in my opinion" to all of the above)

The whole voting thing is interesting because take Google for example. The owners still wanted to maintain water tight control over the company so they own Class B shares whilst they sold Class A shares in the IPO.

Class B shares have ten votes for every one vote that a Class A share has. Essentially it means that the management of Google retains control of the board of directors, and the company. They can elect anyone they want to the board and make any decision they want because they will have enough votes to trump any shareholder objection.

In effect the common shareholder have no say in how the company can be runned.