Wednesday, June 28, 2006

[EMFI] Offers call options

There has been some interest in stock options, EMFi offer the simplest of stock options covered by her own portfolio.

Namely: Out of the money, short term covered call options, American style.
All options EMFi writes expire on the 14th of the month after the option is bought.

What is a Call Option? "An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period."

Investopedia: "It may help you to remember that a call option gives you the right to "call in" (buy) an asset. You profit on a call when the underlying asset increases in price."

EMFi: "A Call option is the right to buy a certain stock {x} at a certain price {y} until a certain time {t}. You purchase that right to buy for a certain price {p} from the option issuer {EMFi}. If you don't exercise your option before or on {t} then the option expires and is worthless."

Why would I buy a Call option?
Well, there are different reasons, first of all options give a leverage effect, are higher risk, higher gain. You can lose your complete investment in a few days time or it can increase in price tenfold. But I will describe some use-cases where you may want to buy a call option.

1) Speculate on a stock that is hard to sell.
Lets say there is a stock ticker: AAAA that hasn't performed well and only trades for like 1 share every week, the price has been stagnant for a while around 30mio isk.
You really think that this month's dividend is going to be massive and the stock will jump up in price to 40 or even 50mio isk and demand will be really high. However if you are wrong you don't want to have 10 or 20 shares of 30mio in your wallet that you will be unable to sell unless you try to sell for 25mio isk.

Without options you would have to buy 10 shares @ 30mio and wait for dividends. (300mio investment)
a) Dividends are massive: you get 3mio dividends, and resell your shares for 40mio making (300mio investment / 130mio profit / 43% profit)
b) Dividends suck: you get 1mio dividends and resell your shares for 26mio (300mio investment / 30mio loss / 10% loss)

With options you would have the option to buy 300 options: [Call AAAA @ 32 - 14th of July] for 1 mio isk.
a) Dividends are massive: you don't receive any dividends, but you exercise your option @ 32m and resell at 40m (300mio investment / 2400mio profit / 800% profit)
b) Dividends suck: you don't exercise your option (300mio investment / 300mio loss / 100% loss)

Of course to profit from the option in the case of a rise you need the isk to cover the buy and resell of the share, this could be done with a loan, or of course, you could offer EMFI to buyback your option for example 5mio / option (900mio profit).

2) Investing in an IPO carefully
Lets say there is a new IPO Ticker: ABCD and you would like to invest in it but you are not 100% sure it is save. the IPO offers shares at 10mio isk... you really want about 100 shares in this IPO but don't want to lose 1bil in about 3 days.

Normally you would have to buy 100 shares @ 10mio isk and invest 1b:
a) IPO turns out to be a scam: loss 1b
b) IPO runs really well and pays out dividend, share rises to 15m: invested 1b hold 1.5b in assets

In this case you could buy 100 options [Call ABCD @ 12m - 14th of July] for 1m per option.
a) IPO turns out to be a scam: loss 100m
b) IPO runs really well and pays out dividends, share rises to 15m: invested 1.3b hold 1.5b in assets

As you can see you can use call options to limit your risk in case of total failure, or to speculate on agressive price increases (using the leverage power of a call option)

I will update this post as questions arise and will use a separate post (on eve-o) for my price lists.

Friday, June 16, 2006

[EMFI] Featured in PC Gamer UK

We are proud to announce that the leading Gaming magazine in the UK "PC Gamer UK" has featured EvE Mutual Fund Inc.

"EVE Online corporations are offering players the chance to invest in their operations, for an eventual share in their profits. The new supply of cash allows corps to purchase new ships and supplies and expand their borders."

"Their board of trustees, including respected and experienced members of the EVE community, will advise clients of potential investments, and manage the vast sums of virtual money"

Thursday, June 15, 2006

[-SVE-] Hook, Line & Sinker

The first major IPO scam just happened and we all fell for it. Janette analysed our failsafes, prepared herself and beat us.

Luckily it seems we will get away with this and will be reimbursed (while Janette keeps her isk). The rules have been changed, it has been made very clear that all sorts of scams including IPO scams are legal now, even when conducted on the eve-o forums.

First of all I want to say I am happy for my investors and my fellow investors we got our isk back, it would have been a big pile of learning money, and I hope the lesson has been learned anyways.

What does this mean for the future?

I personally think it is a good thing!, over the last weeks the quality of the IPO's has been degrading, people were investing in anything, and the services I could offer as EMFi were limited to throwing my isk at an IPO before someone else did so I could get a stake. Of course I have done my famous grilling, but the participation of CEO's has been limited. Why be grilled if you can sell out your IPO anyways?

What I hope now is that the eve-public is MUCH more sceptic at looking at IPO's and new CEO's are much more realistic about the effort they put into preparing an IPO and the isk they hope to raise.

I see new opportunities and increased revenue from our underwriting and venture capital departments, also I see rising stock prices for established public corporations.

Even though we didn't get any tools, the increased awareness of the public has benefited the IPO community.

Watch this space, I will be writing up in detail the services I will offer in my underwriting, and venture capital divisions.

[EMFI] June 15th Closing Portfolio

This portfolio is the portfolio before we paid out June 15th Dividends.

Portfolio before dividends (click to enlarge) :

[EMFI] 1st Month financial report

The first month was a very exciting month, we have seen the highs and lows of the stock market in eve. This is my financial statement for this month after it has been approved by our Trustee Omber Zombie.

Our target for this month was 128 isk dividends, we actually paid out 426 isk dividends, so all-in-all it could be considered a good month.

There is a lot of talk about -SVE- and I will put up a separate blog entry about -SVE- and our resolve around that subject.

First of all our Profit and Loss statement (in millions)

And our Balance Sheet (in millions)

Dividends issued: 426.7 isk / share
Return on Investment: 4.77%
Retained Capital: 501 mio

Previous report
Related Portfolio

Monday, June 12, 2006

[EMFI] Announces Short Term loans

You need isk now for a few days? You want to invest in shares with shares as collateral?

After 2 pilots we are releasing our very short term margin trading program.


Collateral: High profile shares at IPO value
Interest: 1% / day (00:00 to 00:00) + Received dividends during loan period

Already issued a loan for 1.5b and 450m which got paid back within a few days.

This isn't the best proposition, but it is an easy one if you need quick isk for a few days and have a stock portfolio you don't want to liquidate.

Defaulting: weekly interest payment, miss payment by 7 days = losing colleteral

Sunday, June 11, 2006

[XANO] acheives 9.24% result

"Today the first Xanotech dividend is being paid out to Xanotech shareholders, it was a very eventful period of time for us, our BPO was acquired, our production was started, and we were listed on the EVE Stock Exchange. For those of you eagerly anticipating for this day I can say finally say that your waiting has paid off; due to acquiring the BPO much earlier then anticipated, we are having a much larger dividend then expected. "

Investor Vote

Should Xanotech Produce from Profitable TECH II BPCs?

There is a small and growing TECH II BPC market, Xanotech has the ability to acquire TECH II BPCs at a cost to make a suitable profit through production, while not generating much profit, we expect this side-production to add additional revenue.

CEO Analysis: Producing from BPCs in addition to Xanotech owned TECH II BPOs would generate additional profit with very little risk involved. I am expecting this measure to pass without an issue as it will increase dividend payouts.

EMFI voted YES to exploring the posibility of building from the BPC market to increase revenue and profit.

[-SVE-] IPO Sold out!!! within a few hours

Sky Vision Enterprises sold out in under a day.

EMFI has a position in this venture and look forward to a very succesful corporation,

Good luck SVE!

[UEMA] IPO Postponed

UEMA has withdrawn her IPO for a few weeks pending a rewrite of the biz plan, training of skills and better timing.

We support this move and wish them the best in the future,

Investors should contact UEMA for reimbursement of their shares.

Saturday, June 10, 2006

[-SVE-] IPO Interview and Grilling

I have had an interview with Janette of -SVE-:
[edited for readability and security]

Janette > lo
EMFi Manager > just a few quick questions.....
Janette > sure
EMFi Manager > 1) what are the fallbacks for if you go inactive/get hit by a bus? anyone with a directorseat that can run for CEO and liquidate the corp?
EMFi Manager > 2) what sort of BPO's are you going to buy, are you gonna take your time or forcebuy/rushbuy
EMFi Manager > 3) when are the dividend dates
EMFi Manager > 4) is the corp doing the IPO purely for the IPO or will it run multiple financial accounts?
EMFi Manager > 5) how many shares you sold yet?
EMFi Manager > 6) did you apply on EGSE?
Janette > 1) fallback = my brother has access to it all, and will take care of it if anything might happen
Janette > 2) BPOs I'm looking at modules and t2 guns mainly and the good t2 ammo bpos such as long range ammo but I'd rather go with module bpos
Janette > 3) dividend, was hoping to have it every 15th of each month, that will give me almost a week to collect some bpos and make realistic dividends next month
Janette > 4) I don't quite understand the question
Janette > 5) I have 3679 left
Janette > 6) no I did not apply for egse but I might
EMFi Manager > [about Q4] well if there is also a NORMAL corp in the same corp as the IPO
Janette > no it's just an IPO no offices just business
EMFi Manager > can you answer me about the rushbuying?
EMFi Manager > the risk is that becuase you HAVE to buy BPOS and you HAVE to spend 25b you might pay too much or buy a wrong BPO
EMFi Manager > or will you just not buy if the right deal doesn't come up
EMFi Manager > who will (help you) decide what BPO to buy and what to pay for it? have you got expert advice?
Janette > I do the math on every BPO and I will not exceed the 10 month figure by more than 5% over, my brother has several t2 bpos as well so we have some experience in the field
EMFi Manager > why do you do it?
EMFi Manager > what is in it for you?
Janette > other than the 500 shares I have? I've been looking for an investment and this looked like a good way to make use for my freighter and t2 production skills, also I think this is fun, looking at prices investing that stuff
EMFi Manager > are there any really big figure heads that know you well?
EMFi Manager > or even IRL?
Janette > do you know xxxxxxx?
EMFi Manager > yes
EMFi Manager > with my main character
Janette > he's very rich and kinda owns xxxxxxx bpo
Janette > he's entrusted me and he's a friend of mine
EMFi Manager > ok
EMFi Manager > could you have him send me an evemail to confirm?
EMFi Manager > you said you were considering EGSE actually you said you "might" can you elaborate?
Janette > you mean is the IPO not gonna go on egse or me personally
Janette > yes of course I will let it go on egse
EMFi Manager > do you own all t2 component bpos
EMFi Manager > researched?
EMFi Manager > or are you going to purchase the t2 components?
Janette > I have access to several POSes but I will have to discuss with them prices on components, until then I will use market, ram and all that I will get bpos
EMFi Manager > will you ever release a second offering of more shares? or just looking to survive by making the 25b grow?
Janette > I won't, I'm looking to have that 2% of the dividends be enough for further investments
EMFi Manager > sales going well still?
Janette > it leaped around 20.20 but going a bit slower now
EMFi Manager > it seemed you were releasing 5500 shares
EMFi Manager > and 5000 to market
EMFi Manager > but it showed 4500/5000
EMFi Manager > did you actually have 5000 shares OF WHICH 500 for yourself?
Janette > yes
EMFi Manager > so you are raising 22.5b not 25b ;P
Janette > basically
EMFi Manager > ok
EMFi Manager > first I want to buy 1 share
EMFi Manager > so I can verify the corp votes
EMFi Manager > so I will send you 5m ;P
EMFi Manager > sent
Janette > right you want me to send to you or another char?
EMFi Manager > me
Janette > k sent
EMFi Manager > just 1 vote for 4k shares
EMFi Manager > ok.. I will buy some :P
EMFi Manager > was confirming 1 vote has passed
EMFi Manager > to create 4k shares
EMFi Manager > in addition of the 1k starting shres
Janette > ah

[-SVE-] Announces IPO

Janette of Sky Vision Enterprises announces an IPO starting tonight at 20:00 (in 19 minutes)

* Float of 5000 shares @ 5m to raise 22.5 further capital
* 20% of profits will go to increase capital
* Has been interviewed by our trustees OZ and FEM and EMFI Manager
* Exelsior has accepted a Trustee position
* 500 shares will go to the CEO in exchange for freighter, t2 BPO and other stuff

Looks promissing

EMFI Rating: BUY

[UEMA] Announces IPO

* They want to raise 20b to acquire, yet unknown, T2 BPO's.
* will sell 20k shares @ 1m to raise capital
* will keep 10k shares in corpwallet (dividends will be added to capital)
* will keep 25% profits in corpwallet (totalling 25%+33% from the held shares) to add to capital
* will reserve 10% of produce as salary

The IPO isn't raging, but it is being bought up in small 10m-50m nibbles, EMFI has reserved a 5bil block in this IPO pending research and feedback from CEO's of ASCN.