Monday, December 8, 2008

DDE December update

Season's greetings to all DDE shareholders, and the world at large!

First, let me apologize for my unavailability over the last few weeks. The last month has been a difficult one in RL. The demands of my job have increased dramatically in the last six weeks, and over the last two weeks, I have had unfortunate news of the death of a close family member, and the serious illness of another. Needless to say, I have had to focus my attention there, and have in fact not even been able to sign on to Second Life for almost two weeks now.

However, life goes on, as does business. As I had indicated last month, I took steps to ensure the future of DDE, and those steps have now been implemented and are more or less complete. In order to weather the storm of changes, with the downturn in the land business in general in SL, and the increase in prices for Openspace sims, I decided that in order to survive, DDE was going to have to entrench and downsize, leaving a core business that was substantially smaller, but more stable and once again profitable.

November was a difficult month, like October, and although I was able to make all tier payments, DDE suffered a second month of overall losses, albeit it a small loss of less than 50,000L for the month. However, I also managed to consolidate operations by selling or divesting 17 Openspace sims and 4 regular sims in those two months, leaving DDE a more manageable size with 13 regular sims and 17 Openspace sims. Occupancy is back up to reasonable levels, with all of the Openspaces rented, and about 11 of the 13 regular sims full.

Unfortunately, given the "fire sale" nature of the land business recently, I was not able to garner much in sale price for the sims that I divested - in fact of the 17 Openspace sims, 4 were sold at the cost of the transfer, and 5 were abandoned outright. For the regular sims, I got prices of between $300 and $500 each, net of the transfer cost. All in all, I took what I could get in the current market, being more concerned about getting out from under the unmanageable tier level that DDE had prior to October. Current tier costs for DDE are down from $8,000 per month to $5,500 per month, with revenues that for the first time since September will exceed those tier levels.

As we have all seen, some of the most established land businesses in Second Life have gone under recently, so the troubles DDE has experienced are not specific to us, but are being seen with many land owners in general.

The good news is that the worst is behind us now - and DDE is poised to move forward smaller and leaner, but profitable again! I know that the steps I have taken might be seen as drastic, but I thought it was not the time for timid action, but rather bold strokes, and so I did what I thought was best to save the company from going under. Although, as always, I wanted to put the best face forward, frankly six weeks ago, DDE was in serious danger of going bankrupt and losing everything. But it now appears as if we will emerge from this difficult period intact and healthy.

Over the next day, I will put together a package of financial information that I will submit to the International Stock Exchange to begin formal proceedings for a relisting on that exchange. I would presume a vote will be held in the coming days to see if the exchange is amenable, and I would hope to be listed there within a very short period of time.

Thanks to all the well-wishers and supporters that have sent me messages over the last month - and to all the shareholders who have been patient and had faith in DDE as we navigated these difficult waters. I will work hard to validate that faith and patience, and will strive to make DDE the best it can be, and to provide value and returns for its investors.

Please feel free to leave a comment here, or to contact me inworld, if you have any questions, comments, or concerns.