[IPVO] [Multiple Exchanges] Neo & Bee - LMB Holdings

[Keyser Soze]

Investor Protection Plan
The initial 9,600,000 shares of LMB Holdings have the privilege of getting all profits until a total of 0.0035 bitcoins per share has been paid. Following this initial period of protection, dividends will be divided equally amongst all public and private shareholders.

Won't be very cool now to go back on their word.

They wouldn't be.

Dividend payments
The global income of LMB Holdings, including operating profits from all LMB Holdings subsidiaries, will be paid to the LMB Holdings shareholders proportionally, after all operating, growth and miscellaneous expenses are deducted. The 9,600,000 public shares will receive the first dividends up to the value of 0.0035BTC/share, providing public investors a priority in receiving a minimum of 100% return on their investment. Dividend payments will be made on the last working day of each quarter at midnight (GMT+2).

Don't get me wrong, I like the idea and hope they succeed as it will be a huge positive for bitcoin. If they are successful, they probably will need the capital for growth. People need to keep in mind that this is a longer term investment (compared to any other bitcoin investment). I wouldn't expect dividends for awhile.

Of course they may just payout dividends anyway or have so much cash they don't need it for growth. I'm not sure how likely these two scenarios are.

[bittymitty]

They will be producing quarterly financial reports, any profits made will be paid as dividends. The business plan is based on continued income streams from depositors and business accounts, plus other trading methods. They will not need to keep profits for growth.  However if they want to set up another branch they could include the cost as an operating expense which would reduce the profit for that quarter.  Some companies never actually make a profit on paper for tax purposes like Starbucks and instead channel the money through subsidiaries for vastly inflated operating expenses...

Profits = income - expenses

[Herp]

Investor Protection Plan
The initial 9,600,000 shares of LMB Holdings have the privilege of getting all profits until a total of 0.0035 bitcoins per share has been paid. Following this initial period of protection, dividends will be divided equally amongst all public and private shareholders.

Won't be very cool now to go back on their word.

They wouldn't be.

Dividend payments
The global income of LMB Holdings, including operating profits from all LMB Holdings subsidiaries, will be paid to the LMB Holdings shareholders proportionally, after all operating, growth and miscellaneous expenses are deducted. The 9,600,000 public shares will receive the first dividends up to the value of 0.0035BTC/share, providing public investors a priority in receiving a minimum of 100% return on their investment. Dividend payments will be made on the last working day of each quarter at midnight (GMT+2).

Don't get me wrong, I like the idea and hope they succeed as it will be a huge positive for bitcoin. If they are successful, they probably will need the capital for growth. People need to keep in mind that this is a longer term investment (compared to any other bitcoin investment). I wouldn't expect dividends for awhile.

Of course they may just payout dividends anyway or have so much cash they don't need it for growth. I'm not sure how likely these two scenarios are.

They'll have to pay back those 0.0035/share asap, especially if they wanna issue more shares or bonds to finance further growth. Otherwise no one would touch another stock/bond offering.That's another way to go about it, issuing more shares or selling bonds.

[bittymitty]

You should read the IPO (page 1) before commenting.

"Future Shares
No additional shares shall be issued, and total outstanding shares shall perpetually remain at 16,000,000.  Any future capital raised through sale of shares after the IPVO shall be sales of shares, currently 40%, owned by LMB Subsidiaries Limited (UK). "

[Herp]

You should read the IPO (page 1) before commenting.

"Future Shares
No additional shares shall be issued, and total outstanding shares shall perpetually remain at 16,000,000.  Any future capital raised through sale of shares after the IPVO shall be sales of shares, currently 40%, owned by LMB Subsidiaries Limited (UK). "

I've said stocks/bonds. Issuing bonds would be different story. The bond buyers offer a credit line to the company in exchange for a profit share, fixed income or some other arrangement like convertible bonds.

Though...if you read the full version, prospectus states:

Forward-looking statements are based upon assumptions which the directors consider reasonable, but are subject to change due to unexpected events, market shifts, or unforseen circumstances. Although forward-looking statements are believed to be realistic, no representation are made as to their ultimate attainability.

The document is not necessarily up-to-date. LMB Holdings reserves the right to alter, update or remove the information provided in this document at any time without notice.

[bittymitty]

If they start issuing bonds then they will just be a ponzi like the American Treasury and FED.

[Keyser Soze]

Sigh...perhaps I should have approached it differently.

If they are successful early on and able to pay dividends, why are they not using the capital for growth? There is a reason why start-ups and high growth (potential) companies typically do not pay dividends. If they are successful, they need it for growth. If they are not successful, they cannot afford it.

[bittymitty]

If you read their prospectus you will understand the business model. 

Their growth is reliant on customer deposits and business transaction accounts.  They need to increase the customer base every month for several months and these customers need to deposit Euros.   The Euro deposits are then converted to BTC.  If the BTC/EUR rate increases like projected then this difference will be profit for NEOBEE.  They also have some income derived from trading but the information about this is not public.  If the BTC/EUR rate drops then they will need to top up the depositors accounts with BTC to cover the EUR amount.   

[Keyser Soze]

If you read their prospectus you will understand the business model. 

Their growth is reliant on customer deposits and business transaction accounts.  They need to increase the customer base every month for several months and these customers need to deposit Euros.   The Euro deposits are then converted to BTC.  If the BTC/EUR rate increases like projected then this difference will be profit for NEOBEE.  They also have some income derived from trading but the information about this is not public.  If the BTC/EUR rate drops then they will need to top up the depositors accounts with BTC to cover the EUR amount.   

I've read it, although it was a couple weeks ago, some specifics may not be fresh.

How can you increase your customer base without spending capital?

[bittymitty]

They will be spending the IPO capital to increase the customer base.  If they run out of capital before they have enough customers to turn a profit then they fail and we lose our investment. 

I think the point is that if they need to spend money to increase customers at a later point this will be a business expense and will be spent before it makes it to the profit part of their accounts. 

[Herp]

If they start issuing bonds then they will just be a ponzi like the American Treasury and FED.

Not really. Corporate bonds are widely used and popular way of getting money.

https://en.wikipedia.org/wiki/Corporate_bond

[Herp]

If you read their prospectus you will understand the business model.  

Their growth is reliant on customer deposits and business transaction accounts.  They need to increase the customer base every month for several months and these customers need to deposit Euros.   The Euro deposits are then converted to BTC.  If the BTC/EUR rate increases like projected then this difference will be profit for NEOBEE.  They also have some income derived from trading but the information about this is not public.  If the BTC/EUR rate drops then they will need to top up the depositors accounts with BTC to cover the EUR amount.  

I've read it, although it was a couple weeks ago, some specifics may not be fresh.

How can you increase your customer base without spending capital?

If they wanted big focus on growth they shouldn't have included a dividend in their prospectus but they did it to lure investors and now they have to follow through. Bitcoin community is used to getting regular weekly dividends from miner stocks and including a dividend helped them A LOT with selling their shares.

Lots of big companies don't pay a dividend as they want full focus on growth, like Apple for example in the Steve Jobs era.

[Skoutz]

Payment of a dividend should be the last thing in our minds.

This company can grow really big. It will need the cash for growth.

[jbest8283]

Bitcoin community is used to getting regular weekly dividends from miner stocks and including a dividend helped them A LOT with selling their shares.

If this is the case, the Bitcoin community needs to grow up and realize that if they want Bitcoin to succeed as a currency then it needs to act like a currency. Hence, businesses need to be real businesses getting funded properly. If it fails, it fails. That's the risk of investing, especially when you are essentially investing in two things at once. We can't just sit on our hands and expect them to pay out dividends because we are used to it...relax...it will come.

[uhoh]

Bitcoin community is used to getting regular weekly dividends from miner stocks and including a dividend helped them A LOT with selling their shares.

If this is the case, the Bitcoin community needs to grow up and realize that if they want Bitcoin to succeed as a currency then it needs to act like a currency. Hence, businesses need to be real businesses getting funded properly. If it fails, it fails. That's the risk of investing, especially when you are essentially investing in two things at once. We can't just sit on our hands and expect them to pay out dividends because we are used to it...relax...it will come.

+1

[Herp]

Bitcoin community is used to getting regular weekly dividends from miner stocks and including a dividend helped them A LOT with selling their shares.

If this is the case, the Bitcoin community needs to grow up and realize that if they want Bitcoin to succeed as a currency then it needs to act like a currency. Hence, businesses need to be real businesses getting funded properly. If it fails, it fails. That's the risk of investing, especially when you are essentially investing in two things at once. We can't just sit on our hands and expect them to pay out dividends because we are used to it...relax...it will come.

Haha. That was cold but true.

+1

Doesn't change the fact, though, that promising dividends helped a lot with their sale. It would be lame to not to execute promptly the "protection plan" giving 100% of profits to public shareholders until 0.0035/share is reached.

Not doing so would undermine future sale of stock, which doesn't have to be issued but they do have 40% in reserve which could hit the exchanges and they could also issue bonds. Remember they are no strangers to bonds. That Xbond was converted to shares at 0.0025/share.

Also, regarding issuing more shares, remember that things change. Current plans could go out the window one or two years from now, hence the expression "it seemed like a good idea at the time".

[klee]

When does the IPVO end?

[bittymitty]

Dividends are paid quarterly if they make a profit... and the IPO ends on 30th Nov 2013

[ex-trader]

Wow this gets better.

So let me get this right?

Assume in one quarter that BTC doubles (as happens a lot). Neo makes a big profit on all the BTC it holds against Euro deposits and is therefore required to pay it all out to the shareholders.

Next quarter BTC halves again (as has also happened countless times). Neo is now insolvent as it only has half the money in Euros it needs to cover it's euro depositors.

I'll say it again the 'take euros invest in BTC' model does not work and I cannot wait to see what the accounting statements look like through time...............

This is either a scam or a company that completely does not understand financial risks and balance sheets. I think given the efforts so far it's the latter. The problem is that enthusiasm does not overcome a flawed financial model.

[bittymitty]

I think they will be balancing the BTC/EUR accounts daily but paying out dividends quarterly.  So they will have a long period to balance the books and derived profits.  Also keep in mind that their business model is based on continued deposits so a drop in price just mean they can buy more BTC at that time.   If you look at the BTC/EUR price over a long period it is a lot more stable then over the weekly dips and spikes.

A sustained drop over several months in BTC/EUR price will be the biggest challenge for NEOBEE.  It will then come down to how much BTC profit they are making from their other services like business accounts, BTC trading and insurance services.

I agree it will be interesting to see the statements overtime and to where BTC is going over the next few years.