Hamlet Au’s Shocker Scoop: Bill Gates not a Billionaire!!!
by Urizenus Sklar on 01/12/06 at 9:51 pm
Wow, this post by Hamlet Au nee Linden totally woke me from my dogmatic slumbers. Hamlet doesn’t really say Gates *isn’t* a billionaire, he just shows that the chain of conditionals that has to hold in order for Bill to really truly be billionaire is so long that serious people would never consider him a member of the billionaires club. And I think it all really boils down to this discovery of Hamlet’s: all of Bill’s worth is *virtual*. He’s got no gold bullion, no vast land holdings, not even a herd of fucking goats! He’s got some employees and they make this stuff called “software”, and it is, virtual! That means it is Not Real. Now he has stock in a company, and shares in that company have a “value” but it is based on something like if you or I bought 100 shares today. Are the assets in that company backed up by anything real? No way Jose!
Of course there is a sense in which he’s a billionaire: If he started slowly selling his stock, but not so fast that the value tanked, and IF open source software doesn’t wipe him out before he sells and IF Google doesn’t wipe him out before he sells, and IF a lawsuit doesn’t wipe him out first, and IF his business doesn’t get dismantled for anti-trust violations, and IF he doesn’t get shot, and If as soon as he gets his money out he doesn’t put it in financial derivatives and they tank and IF as soon as he gets it out his wife doesn’t make him spend it on starving children in Africa before he gets to stuff his mattress with it, then I suppose he is a billionaire. But what are the chances of that?
blaze@blaze.com
Dec 1st, 2006
Actually, URI, hamlet doesn’t even know the real story.
Anshe has already sold all that land to island owners who live on the land, so she doesn’t even own what she says she owns. ie: she can’t sell the island without paying off the people who’ve already bought the land from here.
Hamlet is right, but for the wrong reasons.
Urizenus
Dec 1st, 2006
blaze, wealth =/= liquidity
which is not to say that those assets aren’t liquid. I just don’t know enough about the contracts with end users (residents) to say how liquid they are. Can they be purchased? Traded? Are they transferable with the sale of the simulators? The sale of the whole company? I don’t know but I’m guessing yes.
The other thing that no one is considering here is that booting the residents and selling the simulators naked on the market would be like killing the goose that laid the golden egg. Obviously these things have enormous return on investment once she develops them and sets up a neighborhood management program. Why everyone thinks the company can’t be worth more than naked servers is utterly beyond me. My guess is that the actual value of the company would be the value of the simulators times some number N, where N is larger than 2. Possibly way larger.
Guni
Dec 2nd, 2006
There is a business value for sold out sims that have a revenue stream from tier. This value is calculated based on monthly income. In addition there are people trading such sims in SL at prices comparable to empty sims. While Anshe certainly wouldn’t want to sell her customers, people and businesses exit that would be willing to buy.
I estimate that 35% of sim land has been sold, 15% has been rented and 40% is land in new sims that are still under development and not yet released. Another 10% is land for sale on the mainland. This means that about two thirds of Anshe’s land holdings would be liquid within 30 days if she wanted to sell out. The L$ to cash part also wouldn’t pose a problem. The combined currency exchanges have a total volume of about 100K US$ per day. Anshe’s forture represents no more than a third of the monthly volume of Linden$ traded in a single month. If spread across 3 months that would be about 10%. It would just disable Linden Lab’s ability to sell new currency on LindeX for a while, or the rate would drop from 270 to 300. But even then, who cares?
In addition, we had investment companies evaluate ACS. While I am not allowed to disclose any of the details, Anshe’s share would not have been less than the stated value of her avatar. That already was a couple of months ago.
Guni
Dec 2nd, 2006
Interesting about Hamlet is that he states as a fact that a Chinese student became a millionaire from RMT. The student himself only admits he sold items worth 6 mio Yen (about 40K US$). The source of the million$ figure is highly speculative. A Chinese police official said that he suspects that the student may have made as much as 150 mio Yen – in an attempt to draw the attention of his Japanese counterparts to the case. I take it that Hamlet has no personal issues with that Chinese student.
A better example would have been the IGE founders. They for sure are millionaires from externally-driven TOS-violating RMT in multiple game worlds. This is remarkable and makes them pioneers, unlike the Chinese kid that tried to emulate them. Comparing the classic RMT traders to Anshe is like comparing apples to peaches, however. For example they are millionaires in real life but not avatars with a million$ net worth. They are out of character and clearly stand outside the magic circle.
blaze@blaze.com
Dec 2nd, 2006
It’s not an issue of liquidity. It’s an issue that Anshe does *not* own the land that she claims to own.
It would be like Bill Gates claiming wealth for stocks that his employee’s owns.
blaze@blaze.com
Dec 2nd, 2006
Ahh, thanks for the clarification Guni.
blaze@blaze.com
Dec 2nd, 2006
I agree it’s a million dollar business (if not a lot more) but that’s a little different than a million dollar book value.
urizenus
Dec 2nd, 2006
blaze, suppose I buy some land in real life and then turn around and sell it for a series of payments spread out over N years. My assets don’t go poof; what I have done is move the value from one category of asset (real estate)to another (accounts receivable). Likewise if I sell my land, but as part of the sale am entitled to tier payments on a regular basis from the inhabitants, the right to those regular payments is also an asset that can be bought and sold (just like a CD or an annuity).
In the case of second life, Linden Lab owns the servers but are selling Anshe and Guni the right to control what happens on the virtual space supported by those servers. That right has a value which is established by the market. Anshe and Guni can then turn around and sell subrights to what happens in parts of the virtual space supported by those servers. Even if we say the rights they purchased from the Lindens are passed on to the customer(not clear they are), A&G acquire new rights (rights to receive tier payments) that have book value.
How do we evaluate the value of that asset (rights to tier payments)? Well, as Guni says, the current market suggests that a sold out sim with residents making tier goes for the same price as a naked sim. So a natural way to evaluate the asset on your books would be as par value to an empty sim.
I don’t know how they do their books, but you could move the assets from category “virtual real estate” to category “tier contracts”, or you could just leave it as “virtual real estate” and regard the tier payments as lease payments and the intitial “sale” of your real estate as being the first payment on the lease.
Nacon
Dec 2nd, 2006
So….
Bill is a millionaire again? oh shocking… Zzz.
Donnagh McDonnagh
Dec 4th, 2006
The headline is misleading, and I really wish that these sorts of cheap gimmicks weren’t used. It makes me feel like I have been tricked, much less I am sure how Hamlet would take it, since the headline is technically a lie.