Subscribe to this topicForums > SL Capital Exchange Archive > Topic: Liquidity and Value
| Jul 24th 2007, 02:46 Monmakr Allen |
Liquidity and Value | |
| Being a small shareholder of just over 700,000 shares of this exchange, a sim owner and a working person, like most of us here. I have come to this exchange in the belief that this exchange has the better product. The thing this exchange lacks is liquidity. I feel no matter how well the product is, if it does sell then the product is inferior. The exchange is selling the product of cash flow, investment, and growth within this virtual economy. Without investors, traders and spectators, the market will fail to sell its product. We need more people here, so when the situations like LNL this past week happens, there is enough power for the exchange to level off the trading and the ability to maintain shareholder value. When a large portion of a company stock is dropped on the market, it should be absorbed by investors that have adequate information to make moves on opportunity. But the investor needs to be there. If there is no investors in the market, then someone (exchange or Company) needs to come to the plate, to enrich and service the investors that hold their investment within the company. This exchange reputation has been tarnished by the actions of the LNL dump. This bothers me being a shareholder. To know that the exchange is doing way to little in the form of bring in people to trade, invest or speculate. The officers of the exchange need to put everything forward to increase the amount of investors, traders, and speculators in the market If it is either doing classes in trading for the newbies coming aboard, or if it is out selling the benefits to other exchange traded companies, bring in not only the choices of different companies on the exchange, but also bring in the major shareholders that trade the equities of those companies. As any market, competition is good, increases fair market price, value and choice. We need to get there! |
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| Jul 24th 2007, 04:41 Il0n Papp |
Re: Liquidity and Value | |
| Indeed! I did not follow the whole episode when AIC decided to run away from WSE and to create AVIX, but what you see on AVIX (and to some extend on WSE) is a lack of investors. So the ones who have quite a number of shares in a given company can play with minor shareholders and are able to move the share price very quickly. This is unfortunate, and so the main question is whether AVIX can survive that long without a strong brand on SL. To be continued... | ||
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| Jul 24th 2007, 07:25 Andy Sao |
Re: Liquidity and Value | |
| I could not agree with you more. I was wondering if and when some marketing will be done. I do not believe just 'being there' will be enough. In the end, if there is no market volume the values of the shares will diminish which will hurt both, the companies as well as the investors. Any chance we can get an official statement as to what will be done? |
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| Jul 24th 2007, 08:42 Investor Allen |
Re: Liquidity and Value | |
| Hello, I agree with you 100% on the problem with liquidity. I feel that more marketing is the best solution but the major key is to spend the marketing dollars correctly. The problems with the exchanges as they are is that there is hundreds of "Day Traders" and very few investors. I think the solution falls in two issues. 1. Bring in Investors that are willing to bring in large amounts of capital and invest in the long term for SL companies 2. Require reporting from the listed companies that is of high enough quality so that investors feel comfortable placing their money here. Currently, I am working with individuals to begin some real world marketing that will bring in RL individuals from the investment world to begin making investments into Second Life Businesses. The key is getting several individuals to invest between 1 and 5 million L$ into this exchange and its companies. If we can get this kind of support I believe the market will change drastically for the better. I am of course, always open for suggestions. |
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| Jul 24th 2007, 11:25 Andy Sao |
Re: Liquidity and Value | |
| That appears to me to be a Chicken and Egg problem. No serious investors will come unless they see a serious transaction amount. I no for sure if I were to dump some serious money I'd make very sure there is at least a CHANCE of getting the money back. As it is with the amount being traded today that just is not the case. Or so it seems. L100k, L200k for a whole day? That can't even be enough to cover the costs of AVIX. Yes there are a number of daytraders. I am one to some extend, but I am also investor. I do not believe investors will come and start buying until the the daily volume starts picking up. You have one very good suggestion though: Require the companies to be more transparent. BTW: It's a while since I saw the last announcement of AVIX, or dividends for that matter. This is no criticism, or if only constructive. I believe if the companies including AVIX would do the same thing as they are doing IRL (i.e. massaging their stock, telling the public what they do, their earnings, their forecats, in short stay in front of the potential investors) we all would benefit. |
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| Jul 24th 2007, 14:11 Investor Allen |
Re: Liquidity and Value | |
| We will file the next report just after the month ends. It was announced somewhere, it was probably easily missed. As for the volume problem, I am looking into bringing in some market maker types, to begin increasing volumes. |
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| Jul 24th 2007, 16:37 Monmakr Allen |
Re: Liquidity and Value | |
| Market makers are a good move, but along with the "true investor" look for liquidity in the stock that is going to be traded. This is very important spot for the day traders to increase volume, increases liquidity, who wants to hold a major portion of a company, when the stocks are trading low volumes. | ||
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| Jul 25th 2007, 00:57 Maelstrom Baphomet |
Liquidity is not the exchange's duty or job.
Edited by author Jul 25th 2007, 01:05 |
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| We are selling a product. it is not liquidity. Liquidity is offered by investors interested in your company's holdings. I've yet to have any of my shareholders who bought at a reasonable price complain about liquidity issues. Sorry. We're not here to make people instantaneously rich. It's a growth oriented capitol market. Investors will follow the CEO's they believe will make them money. The LNL dump has little do to with the market and more to do with the company. If the CEO wants more liquidity for their investor then they need to ramp up their customer relations campaign. Every shareholder has a right do with their investment as they please, including leaving that investment. What the exchange sells is a transaction capable market and in that regard we provide one of the most complete financial systems for trading in all of SL. We supported the first sub-account system, the first (maybe second) integrated bank and stock exchange system (ISE may have beat us, not sure who opened first), our accounting system for each individual account is still ahead of most if not all exchanges. We have done our best for fraud planning and prevention. I don't think there's a comparable market out there yet. I respect ISE and WSE and Dreamland for what they offer, but functionality wise I think AVIX leads the pack still and if folks don't want to trade here, that's there loss.. or the loss of the CEO who's not doing enough investment relations work.. or the loss of the investor who's chosen the wrong stock to buy. I'm quite content with the liquidity of my shares and I don't see it changing any time soon. DGD is going strong. And companies that do well and are listed on the AVIX will see the same results. |
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| Jul 25th 2007, 03:04 Unoti Quonset |
Re: Liquidity and Value | |
| I just write software, and am not a stock exchange expert. So take what I say with a grain of salt. I hope it's ok for me to respectfully disagree to some extent with Maelstrom. Although our product isn't liquidity, the value of our product is tied to liquidity. I have a stock exchange on my sim that I use for testing. Nobody else uses it. As a result, it has just about zero liquidity. AVIX has much more liquidity than my private development stock exchange. That makes the AVIX website infinitely more valuable and useful than my development stock exchange. But they are the exact same product. Having more liquidity, more users, more action, would make AVIX that much more valuable and useful. There's no threat in us being realistic about that. I think there's some really valid concerns posted here, and it'd be a shame to not take the legitimate concerns seriously. Because the value and usefulness of a stock exchange is really linked to the liquidity, it seems to me. |
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| Jul 25th 2007, 11:38 Maelstrom Baphomet |
Re: Liquidity and Value | |
| No, your thoughts are very valid Unoti. Liquidity is important, but it's not the role of the exchange to provide Liquidity. Every CEO on this exchange needs an investor relations and a pr program geared at generating interest in the ownership of their company. It's good for all parties involved if they do this. It is fundamentally the job of the CEO to drive interest in their company whether by performance or by media. If they fail to perform this role adequately it's a good reason to reconsider investment into that particular company. As I've stated before.. liquidity issues are on a company by company basis, not an exchange basis. My shares have never had a liquidity problem to date that I'm aware of. |
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