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For SLReports.net
In what proved to be a highly contentious meeting yesterday at the ISE exchange headquarters, all interested parties who had or were planning on tabling proposals to buy the long beleagured Growth Investment Index Fund (GIIF : ISE) met to formally hash out the details of their proposals, meet with shareholders, and for a defined set of expectations in the handover of GIIF(ISE).
GIIF(ISE) was established to encourage and reward investors for actively participating in procuring new businesses and investors to the International Stock Exchange (ISE). The Growth Investment Income Fund sought both current income and long-term capital appreciation by investing in a portfolio of dividend-paying businesses listed on the ISE that have potential for above-average dividend-yield, dividend growth, and long-term capital appreciation.
The recent sharp increase in ISE(ISE) shares, which GIIF has a significant sum of, increases the desireability the handful of hopeful purchasers feel toward acquiring the remnants of the firm.
Andy Grant's L$0.10 bounty on GIIF/GDB shareholder votes may have been a ruse, but not his desire to acquire the firm. Grant's calculation for the value of GIIF(ISE)'s assets is a range of L$140,000 and L$200,000.
"Based on the 30 day average prices it's worth L$136,306.34" Grant said. "That's if we price ISE at L$6.00 a share."
"I wont bid more than L$150,000," Pablo Sienkiewicz, CEO of SIM(ISE) the first fully publicly traded company in Second Life, responded, "I want to do the auction. I think it will work much better for shareholders, and after all it about what is the best offer for shareholders."
Mart Lupino, who wants to convert GIIF(ISE) to FVS(ISE) wagered that his proposal was more to the tune of L$172,000.
"If it's for the ISE shares," Yanik Lytton, GIIF shareholder stated, "Since it's the only thing worth something in it, then lets just auction them."
"Its easy to liquidate it," Martiorari Moody, fellow shareholder responded, "I'd like to see GIIF continue, so price is not the only issue." Yanik Lytton agreed with Moody, "My problem is not really with the proposals, but with the intent behind it. They are closing GIIF. It was intended to promote ISE. Is that a dream we should put aside?"
"I'm just saying that you are using different words to say you want to take over GIIF and merge it with your company...The whole "new CEO" thing is just the same thing. I just like to call things by their name. We all want to take over, and we all want to merge GIIF with our company."
"That means also that ISE shares are overvalued," said one analyist, "Well i am not gonna buy it at the market price, and this fight to get GIIF means probably that many investor think the same."
Andy outlined his plan, "So, i plan to merge my portfolio with GIIF's, increasing GIIF's assets by 50k. In turn I'd get shares equal to what I and shareholders agree my contribution is worth. Then I'll loan money to GIIF from GDB at no-profit to add liquidity to it. Then I'll rez an ATM which will allow people from outside of ISE to invest directly to GIIF. The atm will go towards GIIF Treasury and they'll be reported as "Demand Deposits" on GIIF's financials."
"I know lot of people who'd invest in me but they don't dare to open an account at ISE. There is just no way i can make them do that. I'm speaking about the average sl user."
"Merging it with another fund, using yet another ATM?" Lytton asked, "The financial world is about to crumble, don't put gas on it."
"What would make my proposal work for you, GIIF shareholders?" Grant asked in conclusion.
"Instead of telling us how much money you would do with it," Lytton replied, "Tell us what you will do with the money maybe." Mart Lupino, CEO of FVS(ISE), was next to present his case. "First, I replace Cocky as CEO of GIIF. How will I lead GIIF? First, I would like to start with a secondary of 21,857 GIIF shares at a price of 3.50. (duration 2 weeks.) This would raise new capital with a value 76499 L$. Total outstanding shares is then 70,000. Why? To buy shares, To get some liquid money in the account, and new people can get in. Second. I will buy and sell shares for GIIF. Some for long term investments, some for short term. Dividend payment, maturity, communication, clearness, market, a proven concept and also positive feelings are heavy weights for me to judge companies. Dividend will only be paid when there's profit. A monthly profit will be used as follow: 40% will be paid as dividend. 40% will be (re)invested. 20% will be paid to the CEO. My rewards--I get paid if there is a monthly profit (20%). I don't have shares in GIIF. Only if profit I get paid."
"You will be a shareless CEO?" Lytton was quick to ask.
"Also I got the convertion of GIIF to FVS. 9 GIIF shares for 4 FVS shares and only dividend payment when there is profit. No SPO there." Lupino countered.
"I don't see how shareholders can vote when the target is constantly moving," investor Arbi Tomsen said.
Wenden Xeno, SAS(ACE) CEO, due to time constraints, was next to present his propoal: "My Offer is Simple- No gimmicks- I will give every GIIF shareholder 1 SAS share and L$1.00 for every GIIF share. I value GIIF at L$2.90 a share- my offer is worth L$3.50 a share, thats a good deal!"
"So your offer is to take GIIF to another exchange?" Pablo Sienkiewicz asked skeptically.
"Too few thanks." Lytton responded. "I'm sorry, but at this very minute, I can get L$4.04 for a GIIF share."
Andy Grant and Pablo Sienkiewicz were both quick to question whether Xeno's offer included a move of GIIF assets to be traded on the ACE exchange, where SAS(ACE) is traded.
"Yes- a move to ACE listed SAS for GIIF shareholders," Xeno clarified, "but check out the SAS comapny policy and financial statements and youl find yourself a good home."
Arbi Tomsen, majority shareholder of SAS(ACE), came to Xeno's assistance, "You have to factor in dividends. SAS pays a regular dividend. It has liquid assets to back up the shares. And, it is invested heavily in ISE."
Mart Lupino countered, "I pay also regular dividend. I did in the past also for FVS. Becouse there are little outstanding shares dividend can be done with even little profits."
Arbi Tomsen responded, "I investigated CEO's from the different companies and found Wenden to have one of the most consistent track records of all of them. Some had concerns that SAS doesn't trade on ISE but I just wanted to remind everyone that SAS and Wenden have a good relationshp with ISE. I do understand when you get comfortable with one exchange a change may be hard to get used to. But SAS is independennt and isn't the exchange itself." Cocky Dagger took this opportunity to reitterate, "If GIIF shareholders accept Wenden's offer then they will get SAS shares traded on ACE. And it's up to the shareholders to decide, they own the security."
Pablo Sienkiewicz, SIM(ISE) CEO, was next to present: "My proposal is very simple, i want to take over GIIF. SIM back in the day did land and shares, and we want to do that now as well..since land is so..unpredictable now. So my offer is pretty simple. Take over GIIF. 4 SIM shares for every GIIF share."
"Why are you offering less than it's actualy worth?" Lytton asked.
"Yanik im ofering 4:1 How is that less?"
Yanik Lytton responded, "GIID is between 4.04 and 7.01. Doesn't need a calculator to see the difference."
"Lets see how many shares can get out for more," Sienkiewicz challenged, "We all know how the market works."
Stray Underwood asked, "Will SIM be releasing new shares to cover this?"
"A little less than 200,000 shares, that will be deducted from SIM shares," Sienkiewicz answered, referring to the 4:1 combination.
After all offers had been presented, Cocky Dagger, ISE CEO and acting CEO of GIIF, explained: "I am in the process of contacting the major shareholders and have sent several of them messages. The shareholders have the option to vote for one of the offers or to vote none of the above. I am going to pull together the proposals, get feedback from a few more shareholders and put a vote up with an expiration date. I don't know what that date will be yet. I doubt it will go past November. The other important thing to consider is that individual shareholders, evidenced by Yanik, will act in their best interest. If I can round them up then the process should move quickly. I am trying to contact them individually and hope that we can get the vote going. I'll try to have it done by tomorrow. Hopefully shareholders get back to me, so I can get this done by weekend and moving."
Andy Grant had one more idea in closing, "If there is a huge disagreement between shareholders, ie: 20% vote pablo, 20% vote mart, 20% vote SAS, 20% vote my offer... would it make sense to split GIIF, or liquidate it ? I'm just thinking minority interest."
Cocky Dagger responded, "A few people control enough shares where the fate of GIIF is in their hands. And specificially one shareholder."
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