A prior commenter brought to my attention an observation about ACE, that many of the IPOs appeared to them to be fairly untested and the standards of the exchange to be at risk. That said, the asked me to comment on my thoughts of the companies, their prospects, and their business propositions. That said, I am now going to begin an alphabetical review of the IPOs currently listed on that exchange at this time.
Disclosure: As policy, DGD buys a small amount of all ipos, larger amounts of promising IPOs, and day trades the one that it buys small amounts of. Therefore, DGD already has at least a minimal interest in all these companies. However, I have never let that skew my presentation of judgment to the public.
In alphabetical order they are:
ACE:Prospectus. Value Proposition: Exchange operations.
| Shares to issue publicly | 7,700,000 |
| IPO shares sold to date | 816,565 |
| IPO shares remaining | 6,883,435 |
| Total shares in company | 16,000,000 |
ACE is an offering of ownership in the exchange operations themselves. It is not uncommon for stock exchanges to raise funds initially, the purpose of the funds is to establish a bank on which trading can take place and to allow for ease of deposits and withdraws of new clients as well as to cover some moderate expenses the exchange may witness during the initial stages of operation. The IPO is well written and recognizes the weakness in the exchange market with 4 pre-established existing competitor exchanges. Typically, a well managed exchange is a stable investment. The risk is that poor management will allow anyone access to the market's capitol, subjecting it and shareholders to fraud that could potentially break the value of hte exchange itself and drive its clients away. Though ACE is a strong offer being the operations of the exchange itself whose revenues would be obvious to the public in the form of the commisions on trading, it could be undermined by the operations and management of its landlord BNT whose CEO, Intlibber Brautigan, co-owns both ACE and BNT. Proper management, however, could bring both companies to extraordinary prosperity since BNT has a large asset base. Time will tell where these futures will go but BNT has greater freedom of action trading on its own exchange. However, with greater power and ability comes greater responsibility. Abuse and mismanagement or over-reaching.. can be lethal. Slow and steady is the course to progress.
BAM:Prospectus: Value Proposition: Acquisitions And Mergers, rebuilding broken companies after buying them out.
| Shares to issue publicly | 1,000,000 |
| IPO shares sold to date | 25,981 |
| IPO shares remaining | 974,019 |
| Total shares in company | 2,200,000 |
Travis Ristow is the CEO of this company and in my eyes the CEO is and makes the company in Second Life. He's been a friend of mine and pretty reliable when it comes to the operations of his existing company on ISE, BCX Bank. DGD also owns property on one of his estates and it turns a steady profit running a vendor booth next to his banking operations. Travis seems pretty business savvy, but a business in Acquisitions and Mergers within Second Life exposes itself to a lot of risk. At the same time, there is also a significant amount of room for reward. Time will tell if this venture is profitable, but there is potential here. It all depends on how the risk is managed and that is true about any investment firm. I can't help feel slightly skeptical though for business operators who have more than one operation listed and their ability to keep financing separate. You would imagine they could use the strategy for the new business for their existing operations. That said, I still think this corporation may have a future if it is executed on correctly.
FWD:Prospectus: Value Proposition: Content and Marketing Information provider.
| Shares to issue publicly | 800,000 |
| IPO shares sold to date | 12,597 |
| IPO shares remaining | 787,403 |
| Total shares in company | 2,000,000 |
I do not know much about the insiders of this particular company, Never met the CEO or any of their staff in second life. This worries me. I see a lot of folks around the SL Finance communities and I invest with only who I trust or who I've seen running existing business operations and am aware of their ability to manage their operations. That said, I can't make a judgment on this company much based on its leadership. However, I can say that the value proposition is potentially viable. The idea of providing a "Newbie Haven" in order to exploit marketing contacts and collect data as well as to attract vendors is far from uncommon in Second Life. The real question about this company is how will it distinguish itself from its many other competitors? What will make it succeed? How motivated are the executives? I've only seen a few operations like this last any amount of time and I'm very skeptical about its prospects, but at the same time I feel compelled to give people I do not know an opportunity to prove themselves. This investment has a significant risk, versus reward factor and may not be for the faint of heart.
OIG: Prospectus: Value Proposition: Various investments including those in real life.
| Shares to issue publicly | 7,000,000 |
| IPO shares sold to date | 61,619 |
| IPO shares remaining | 6,938,381 |
| Total shares in company | 12,000,000 |
Basing a company on RL investments has repeatedly proven catastrophic in Second Life. DGD has a policy of avoiding them because of this, and because of the potential for basing your security's performance on RL securities risks breaching REAL UNITED STATES SECURITIES LAWS which clearly state that any asset that is "fungible" is no longer just a game, but a real.. trading security. I cannot trade my DGD stock for cash at the cashier's counter or barter it for food. I could however, take my ford stock and theoretically sign it into my grocer's name for food if I have the certificate and they're willing to accept that trade. That said, I would not be surprised if this company is not shut down.. or does not even get off the ground. If it does, I'll day trade it, but won't likely own much of it for fear of the U.S. Attorney General's office shutting it down and I losing all linden value. Also, the biggest bank collapse in SL history (Ginko Bank) resulted from a Brazilian that was trying to make revenues from his deposits in RL securities. It amazes me that this CEO account is listed as being registered from Brazil. Same person? In SL, how do you know? I'd advise most investors to avoid this issue like the plague unless you're just day trading. Long term positions are at significant risk of catastrophic loss.
OMG: Prospectus:
| Shares to issue publicly | 1,200,000 |
| IPO shares sold to date | 154,887 |
| IPO shares remaining | 1,045,113 |
| Total shares in company | 3,000,000 |
This prospectus was generally okay with me as there are many successful clothing entities in SL, just depends on the talent of the artist. This is what changed everything:
Use of Capital
Use of Start-up CapitalL$700,000 - Labor for designing clothes *$2,777 usd*
L$350,000 - Strong Marketing Campaign for months 1-6
L$150,000 - Misc. costs (land tier, events, prizes/camping, etc)
If anyone tell me why in Second Life anyone should be paid up front $2,777 us dollars for the design of clothing when I can make a sweatshirt for free, I'll reverse my decision that this is a scam.
Shortened Product line description:
Lines of clothing equalling around 140-150 different outfits.
So they're charging shareholders 20 USD per outfit that may, or may not sell. I'll let the investors make the decision on this one, it could pay out, but I don't anticipating that recapping its initial investment value any time soon especially with the added costs listed that are not one time, but sustained long term costs.
"Someone pay me 2777, I'll make 140-150 lines of clothes for 2777!!! And then put them in shops for you.. and they'll sit there.. and they'll stare at you.. and they'll stare at you.. and you'll own it all! And you'll have to pay for its rental spaces each month so you won't really make that much money on it. Oh, and thanks for the 2777 USD!"
Sorry. Have to mock it just a little.
The use of capital needs greatly expanded upon and I think investors deserve more.
Summary in response to the comment here by an anonymous user:
Is ACE rushing IPOs out the door for growth? Out of these 5, I'd strongly question 2, and have some clarifications to ask of a third. I'd say, yes they are pushing things a bit and allowing their standards to slip? Yes. I believe they are. If they want to be anything as successful as their predecessor exchanges they must be more selective. In my time allowing IPOs at AVIX (what CAPEX was before it was purchased). I eliminated at minimum 90% of all IPO proposals. Of the few listed on CAPEX now, several were not even approved on my watch and only one company has ever failed that I allowed to list, (CYB). Skepticism is healthy, an exchange showing a lack of it, is putting themselves and their clients at significant risk of permanent, bad will and loss.
Thank you for your inquiry Anonymous. Anyone whose corporation is listed in this blog who would like to clarify their position of their company in the comments, please feel free to do so. We all know I am not a Nazi, I encourage free speech 100% so long as it is constructive and non-derogatory dialogs.
