Subscribe to this topicForums > L&L Financial Services Public Forum > Topic: Ideas to be put on the table
| Feb 24th, 18:15 Lindsay Druart |
Ideas to be put on the table | |
| 1. Addressing the liquidity issue - We can't bring it in as fast as it goes back out and it is hurting the brokerage as people are buying and selling but unable to withdraw. My proposal, all funds deposited before the banking ban be issued a 3:1 split of LNL shares to the Linden. 100% liquidity on the remainder can happen with in a day or so. There will be two options for the split: 2:1 split with guaranteed buyback at market to commence no later than June 1 via private sale no matter how many shares on hand at that date, or 3:1 split with no buy back option. Nothing set in stone here. I am throwing out ideas. This more affects depositors than shareholders. 2. Merger with LCA - The reason LCA was taken from LLFS was because of the conflict of interest with a bank holding another banks information. Since this is no longer an issue, it would be a lot easier for the business development portion of the business to have immediate access to investor tables via the LLFS customer base and exercise IPO inclusion via LGEX which runs on LLFS. I propose a 3:1 split for LNL to LCA. None of this will be realized until we have the liquidity issue under wraps. We do not want to open LCA shareholders up to that. With both ideas here that will create more shares on the table that we had initially which in the short term will devalue the stock but without doing this now, we will never be able to realize dividends on LLFS. Currently, all profits have been going towards liquidity. Ideas? Thoughts? |
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| Feb 24th, 18:32 Lindsay Druart |
Re: Ideas to be put on the table | |
| Item #1 has been put to vote in the L&L Bank and Trust group to find out what the depositors want. | ||
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| Feb 24th, 18:39 Lindsay Druart |
Re: Ideas to be put on the table | |
| Sully Okelly would be the CEO of the combined companies | ||
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| Feb 24th, 18:44 Anastasia Gazov |
Re: Ideas to be put on the table | |
| Regarding the first option, perhaps both types of splits can be offered. A depositor could choose the buyback option going to a liquidation fund (much like BCX) or could choose to take LNL stock straight up. This would keep the company from being diluted too much while giving the option for eventual liquidation. I know that I would just love more LNL shares. | ||
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| Feb 24th, 19:16 Servme Nakamura |
Re: Ideas to be put on the table | |
| I can't promise any "constructive criticism" right now, so if some ideas or questions seem harsh or far sought, please keep in mind that it's 3AM here and I'm not trying to put any suggestion down, but are thinking out in public. For the record, I'm both a depositor as well as a shareholder for LLFS and LCA. 1. we get our cash balance exchanged for 3 LLFS shares per L$ and then are at the markets mercy. Thought : We are free to sell as we like. Sounds like a SLW and WTF to me. Stock will be diluted massively and people will dump at even lower prices than LLFS trades at currently. Net result for both shareholders as well as depositors is a substantial loss, or am I missing something here? 2. Get cash balance exchanged for 2 LLFS shares and get those bought back through a private sale to commence no later than June 1st. Thought : What will the buyback price be? Market price at the time? Cash balance value when converted? Commencing no later than June 1st, but 1 private buy back would also fulfill that claim, where others may have to wait another 3 months? I hope it's June 1st 2008 btw? 3. Merger with LCA, 3 LLFS shares to be converted to 1 LCA share. Thought : right now 3LLFS is worth about 1.35 LCA, so another loss is being incurred. I see no substantial reduction in cost as LCA and LLFS would still run on the same platform, as they are doing now? This option would only affect current shareholders, or would depositors first be converted to LLFS, then to LCA? Dilution of LCA shares as far as I can see. 4. LLFS profits are going to liquidity. Thought : weren't deposits invested in RL? While I can understand that profits (or in the case of LLFS, losses for the month of January) are being used to allow withdrawal of deposits, this makes LLFS shareholders giving out an interest free loan to those who want to withdraw. After all, if they withdraw their money, they use the profit that all shareholders own and the L$ deposited can't be used to generate income anymore. When RL investments are coming to a close, will they solve the liquidity crunch and have generated enough profit to also make up for profits used for deposit withdrawals? If so, at what time frame are we looking, is it June 1st? Ideas/concerns : From a depositor point of view, I'd not be too fond of getting stock I don't want, or can only convert to liquid cash at a loss. The guaranteed buy back option would postpone the option to converting the balance in L$ till June 1st at the least, unless depositors want to sell out earlier at market rates. From a shareholder point of view, there would be lots of "new" shares to suddenly float the market, sinking prices and diluting the pool, without anything backing it up. You could argue that there would be no diluting as the liabilities would decrease at the same rate, but deposits right now don't "cost" LLFS anything either, as interest payments are not allowed. Letting the cash balances sit and allow withdrawals as funds come in would be the best option. To distribute the available funds as evenly as possible, you could have customers that want their cash to state so in a support ticket (or even consider everyone a willing withdrawer and request that customers submit only if they don't want to be included) and take the total amount funds available each week and divide it by the total amount requested and give everyone their percentage. That would not benefit large nor small depositors and treat everyone evenly. Depositors that don't want or need to withdraw can be kept out of the equation, making more available to others. You mention that the brokerage is being hurt by the liquidity issue as well. However, as the brokerage is a source of income, it would pay off for everyone to get that running as well as possible. People buying would need to bring in new funds, which would in return guarantee sellers immediate withdrawal possibility. As long as we keep buying and selling using existing and currently non-liquid LLFS balances, nothing changes and only the liability swaps from one depositor to another. I'm not sure that100% new funds should be injected when buying, a lower percentage could be considered too. Many sellers may be happy to get out 50% or 75% immediately for cash, and keep the remainder on their balance to be distributed according to the availability of funds. I may have misunderstood some things or worded my ideas and concerns a bit bizarre, so anything that sheds more light unto the issues and potential solutions at hand is welcome. |
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| Feb 25th, 00:20 Vitall Beck |
Re: Ideas to be put on the table | |
| Servme, I understand your concern about well-being of the LLFS shareholders, but what about poor LLBT depositors who have their money currently trapped on non-interest bearing accounts against their will, and who currently have no chance of getting out? At the same time, the money trapped on those accounts interest-free still WORK and create value for LLFS shareholders. If LLFS is currently illiquid and unable to honor its liabilities giving back all money to its depositors, would not it be FAIR for LLFS shareholders to offer debt-to-equity conversion option to the depositors? It will give depositors a share in the profits of LLFS which they are otherwise denied, as well as improve liquidity for LLFS. BTW, without such liquidity, the prospects of LGEX ever taking off the ground look REALLY bleak. I agree, however, with the opinion that the conversion should not be obligatory, but optional. Those shareholders who would rather prefer to keep their cash balances until such time when LLFS is in a position to give them cash back should get special locked accounts (non-interest-bearing CDs?) until June 1st, or such other time as LLFS management thinks is feasible. |
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| Feb 25th, 01:34 Servme Nakamura |
Re: Ideas to be put on the table | |
| Vitall, That was the line of thinking I was trying to explain. I wasn't advocating leaving trapped depositors in the cold - as I disclosed, I'm a depositor as well as a shareholder - but merely looking at the options from both sides of the fence. As I wrote about the locked balances not being an economic "cost" to LLFS at this point, I knew very well that it could be seen as if I was promoting staying at a standstill. That was not my intention though, but I felt it necessary to point out the fact anyway. A voluntary conversion, I'm all in favor of. A forced one such as we've seen all to much recently, not. |
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| Feb 25th, 01:46 Lindsay Druart |
Re: Ideas to be put on the table | |
| I do want to make this as optional as possible. This is why I have held off until now while all of the other banks that are still opens did took the forced routes. I have another bank asking me for his money back now but he turned mine into shares. But whatever on that one. At the rate we are going, I keep hitting my limits on purchasing lindens...like right now I can't buy any on my personal account. It is taking way longer to realize that anticipated and the other services are suffering because of it so its like we can never get the leg up. While we made a profit in February, there is not much to do with it but continue to liquidate. The brokerage nor LGEX will realize without fixing this first... Keep the ideas coming guys. Thanks! |
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| Feb 25th, 15:04 Scott Nestler |
Re: Ideas to be put on the table | |
| Lindsay, If you made a profit in February are current shareholders going to see a dividend finally?? |
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| Feb 25th, 15:11 Enky Nakamura |
Re: Ideas to be put on the table | |
| I agree too that the conversion should not be obligatory but optional. Main problem here is to build up a cash reserve, you can go on slowly doing that using profits, maybe 50% of profit to shareholders and the rest for building up a cash reserve. I cant be more precise, i dont know the numbers in details to calculate how much time it will require for building up an acceptable cash reserve. TCare Enky |
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