Analysis of Data

After completing this list of information, I found a few things very interesting and some troublesome.

First off, it may come as no surprise but CAPX is one of if not the strongest company in the game. IF you were to evaluate the company by real world standards the share price would be closer to L$53. But this is not real life, and I doubt anyone would pay that in Second Life. (For now Skip) But even a fair evaluation based on the shorter time tables we seem to work with in Second Life should put the stock price between L$9.5 and L$13.5. Couple that with the fact that this stock is in essence the safest stock in the game. (If it goes under all the other ones effectively do as well, at least in the short term) And the price may really be closer to 15 or 16. However, it would take a big cash infusion in the market and less IPOs / SPOs for this to happen.  Target price for CAPX short term (3 months) is 9, long (9 months) is 10, if the IPO and SPO markets cool down.

That brings me to another point, IPOs and SPOs. Let me start off by saying I am neither for all of this cash centralization nor against it, I love the fact that CAPX has added some high quality companies to the ranks. Skip is very correct when he says that the companies that were on the exchange prior to him showing up would have had difficult time finding new investors because of the old stigma the exchange held from years past. And if you have been tracking the level of L$ on hand since he has shown up, even after the IPO money has been withdrawn, it is up over L$2,500,000. However, as new money comes in, most of it is going to the IPOs and in some cases the SPOs. In fact, some if not many people are selling shares of older stocks, for the new shiny ones. What this does is depreciates the value of other stocks, some that may actually be better than the IPOs coming up for sale. Ultimately what this means, if the pace of IPOs and SPOs remains the same as it has been over the last 3 months, other stocks on the exchange will continue to become deflated. Possibly a buying opportunity for those who can hold out till new capital shows up. With this presentation at the SL Community Convention in California coming up, I believe new capital may be just around the corner. Question is, will it go towards trading, or into the account of the next IPO company.

Speaking of capital, the money that is on hand is leveraged many times over. I added up all the “market values” for the companies and the number is startling. L$309,107,599.44 is the total value, that equates to a 60.6 to 1 leveraging of the money currently on account at CAPX. Now, if I remove the company that is most overvalued from the mix (NIC at L$170,000,000), it brings the number down to L$139,107,599.44. That would bring the leveraging down to only 27.3 to 1 a much more reasonable number. When you consider that on average, 51% of a company is owned by the CEO for operational purposes and sales of their shares normally only come from outside bidders, or money outside the system. That brings the capitalized or “market value” price of all companies down to L$68,162,723.72. Leaving the leveraging of the on account L$ to only 13.4. Still above where I would like to see however not nearly as scary as the 60.6 or even 27.3 number. Leveraging of 1 to 10 is the standard number a bank in the US uses, and may serve as a good way to judge the current situation at CAPX. Ideally based on current stock prices, the on deposit number would be around L$6,800,000.

Question, concerns, comment below.
Always remember, this is just a game, for fun and never substitute real world investing with Second Life investing.