Friday, June 27, 2008

Update: Summer is Here! DDE relisting???

Hello world :-)

Well, I know I haven't been blogging very much in the last couple of months, but RL has been occupying far too large a part of my life. I got a new job, and the hours are a little insane - but it's all good.

Of course, as a result, my time in Second Life has been somewhat limited, but the business is set up to run pretty automatically now and only requires ongoing maintenance, so it has not been a big problem. Business has been... not bad. The decrease in occupancy that we saw in May on the sims has improved somewhat, but it still is not back to the levels it was before then. Nevertheless, DDE remains a going concern and profitable, and I am expecting typical dividends for June (0.1L per share). We will have to see the final June numbers before a buyback can be considered. All in all, I am happy with our performance, and I think we will be able to weather the typical summer slowdown with no problems.

Ok. So. I have been asked by a few people in recent weeks whether or not I would ever consider relisting DDE on another SL stock exchange. Things seem to be working well with DDE being run independently, although it is quite a bit of work at month end to get everything figured out and dividends paid. But it is probably not more work that CEO's on the exchanges these days have to put in to post their financials every month.

My answer has always been the same - that I have no intentions of relisting after my experiences on the WSE.

However, I want to be open to your opinions on the subject. I know that for some people, being unable to cash out or to trade shares is annoying. On the other hand, you have a pretty guaranteed return on your investment, and you know the price at which your shares are going to be bought. Were DDE to relist on another exchange, I cannot say what would happen to the share price - it is simply unknown. From my observations, share prices on SL exchanges rarely reflect real assets, or even company performance. It has also been my observation that land companies in particular seem to trade below their net asset value per share.

So, I guess what I am saying is that I am open to talking about it - although it would require some convincing. I would be interested in your opinions about whether or not to relist, and what exchanges you think are worth looking at, and why. Please leave a comment here or contact me inworld - if i don't get a lot of comments, i will simply assume there is not a lot of interest...

And as always, please feel free to contact me inworld with any questions, comments, or concerns. Or just to say hi!



Anonymous said...

DDE is now the most reputable and trustable company in SL. We, lucky shareholders, should be happy of the results, getting our dividends and relax.

However, Delicious has a unique opportunity in SL finance.

Having acquired such a credibility, DDE would greatly benefit any exchange she, eventually, will choose
Point is that the existing exchanges, even though some of them are trying to improve their systems, are lacking of good TOS aimed to minimize risks and maintain a good quality control of their listed companies.

Especially at IPO level where it all begins.

This forum should be about two topics (sorry Del if I add a new one)

1)Should DDE consider re-listing?

2)If yes, which improvements we should expect from the chosen exchange?

eliale morigi

Anonymous said...

I would support listing, the problem is just that there are afew exchanges who's either converted into MMORPG games, or tried to "regulate" what cannot be regulated by forcing on companies all sorts of "listing requirements" (wich for the professional criminal takes just a few minutes to put some fictional numbers into in order to show they are GAAP compliant).

Exchanges should simply stop pretending that they are able to regulate something else then "WE SHALL DELIST YOU FOR DISAGREEING WITH OUR TERMS OF GAMESERVICE!". It's just pathetic.

This really leaves me with just 1 exchange wich seems to have understood how it should be done, it's the ISE.

Anonymous said...

I can definitely understand why you are reluctant to associate with any exchange after negative experience with WSE. However, I still think that relisting may make sense for two main reasons:

1) Providing a degree of objectivity to buyback pricing and process.
Del is, no doubt, doing her best to make buyback process fair to her shareholders - but let's face it, current buyback pricing schedule is established more or less arbitrarily. It is fixed and does not reflect any changes in DDE value due to market conditions. For example, a hit to DDE valuation due to LL land pricing cut, or possible increase of valuation if things go really well for the company. Free trading takes care of such things more or less automatically and establishes equilibrium pricing that reflects fair market value.

2) Increasing liquidity for existing shareholders. Again, Del does great job providing liquidity for those who wants out, but it may be hard to sustain if one of the bigger shareholders suddenly has a pressing need to liquidate his position. Free market would allow more flexibility and more instant liquidity. Also, it is quite possible that external investors will create additional demand for DDE stock, thus increasing value for existing shareholders.

If we are talking about the choice of exchange for relisting, SLCapex is the most widely used, stable, mature and trader-friendly platform, in my experience. Even though it went through a rough period after the banking ban, it is now in a stable operations mode. ISE was remarkably trouble-free through its operations and demonstrated high level of robustness to external events. However, its investor base is quite limited and trading platform... let's put it mildly, has to go a long way to attract experienced traders. Other exchanges are either over- or under- regulated and do not have enough liquidity, IMHO.

Vitall Beck