Edit
2: I finally read the public loan doc, and they are getting a base rate
of 0.25%, so their interest cost is actually going to be around
$10,000, if that, so they are potentially saving over $800,000."
No, this is completely incorrect. Abrushing is excluding the default rate and margin from his calculations and only using base rate. This means his interest calculations are between 9x and 17x lower than the actual loan interest rate.
The charge document is quite clear on the the loans interest rate range:
Base Rate means the base rate of the Charges from time to time (which at the date of this Agreement is currently 0.25%)
Default rate means the lesser of: (i) the Rate plus 2%; and (ii) the maximum amount permissible by law
Margin means 2% per annum
Rate means the aggregate of the Margin and Base Rate
If people do not understand these things they should really avoid writing authoritative pieces as if they understand the situation and have all their facts in order.
Edit: I see that Abrushing is a /r/dereksmart "archivist". Nothing more to add.
I noticed that as well but wouldn't have been able to put it as eloquently as you did. Their credibility kinda falls apart when they think a bank is giving out loans for 1/4 of a percent.
I think the credibility falls much more apart by this part of that post:
"They could move $4,050,633, which would convert down to £3,200,000 for an accounting loss of $850,633"
Any country that uses it's tax payers funds to help finance video-game companys and create jobs for the hard working folks has my blessing and ultimate support! Gos bless the UK Gov, Coutts & Ortwin for his financial experties.
Edit: I see that Abrushing is a /r/dereksmart "archivist". Nothing more to add.
Those guys are the cream of the crop of the SC cultist movement. It's no wonder SA has shifted attention to them instead of the official subreddit. The amount of batshit crazy stuff they type is very interesting
Any country that uses it's tax payers funds to help finance video-game companys and create jobs for the hard working folks has my blessing and ultimate support! Gos bless the UK Gov, Coutts & Ortwin for his financial experties.
This is financial expertise. Not taking a loan counting on your currency, already at it's lowest point in 5 years, and at the bottom of a ~monthly oscillation, going even lower. Especially when the US President (or at least much of his cabinet and advisors) are attempting to make sweeping changes to the economy whilst under an investigation that would almost certainly unravel the economy if anything comes up heads. The GBP going lower against the Euro would be a kick in the teeth for Britain, but makes a little more sense in theory.
If the GBP goes up at all vs the USD or Euro then that takes away from any of the gains in doing it right now while putting your main studio and half of your game (or one of your two games, whatever) on the line to do so. It just isn't worth the risk with that collateral. Make a new jpeg to sell and offset the expected exchange rate loss instead. If there are so many new people joining every month, surely some would want an equal chance at a newly released image.
Well i dont have enough money to pay the rent this week, could i borrow some money until payday please? I'll use my car as security!
Oh SIR is a very wealthy man, and a very cunning financial operator! I bet sir could make an $850k shortfall disappear with just the smallest marketing campaign!
Well actually im shit broke and about to be evicted.
Tish and pish sir, you are clearly just looking to leverage your immense wealth in a very stylish way i think! Ill put you down for 50 quid and we will want the house if you fuck up.
How can any of you have the guts to justify a loan of any kind at this point
..especially such atrocious deal where you have to back it up by your entire IP..
If I were a backer from day one I would really want to punch CR in the face
Makes me mad even when I dont care, this is some unbeliavably immoral bullshit
Welcome to the thread.
You may want to READ the thread first and get your facts straight (e.g. "entire IP")
As a backer I consider this a smart move that makes economic sense and makes more money available for the Star Citizen project. A good thing in my book.
I have no intention of punching Chris Roberts in the face.
There are some things I consider immoral bullshit - the Star Citizen project is not on this list.
Yeah raising 4 millions is peanuts for CiG marketing experts. But leveraging their wealth is also a smart move.
If you do it intelligently.
You're implying they don't need any money, yet they are using their main studio and all their single player game, plus the future revenue streams from it as collateral on a loan that, using the now default 3,200,000 GBP assumption would have netted them a savings of roughly 500,000 GBP from prior to Brexit until now. Before calculating interest in there. Less with it. It is a very short loan term so interest shouldn't be all that much regardless. I don't like sorting out compounding so I'm leaving it at negligible.
At pre-Brexit GBP levels (~1.44USD) it would take about 4,608,000 USD to get 3,200,000 GBP. Post Brexit (now ~1.22USD) it would take roughly 3,904,000 USD. The difference in Euros (~1.19 to ~1.13) is even less pronounced. To assume the GBP may drop some is fair, particularly against the Euro, but it's unlikely to drop that far again. The shock factor is gone and the markets are correcting for not much happening until 2019. It's more likely it will remain static or rise slightly depending on what the US economy does. If nothing else, technicals still play into it going up some from here.
To extrapolate those numbers down to layman levels, that's the equivalent of getting a car loan and the bank requiring you to use your house as collateral for 15% down. Unless the bank has seen the numbers and your house just isn't worth as much as your self reported numbers would suggest. Maybe you pay it off without a hitch and it was all for naught, but it still isn't a smart play.
Spinning it even more, where does this whole conversion come into play? The rebate is a credit from the British government. They use GBP. Your expenses are paid in... GBP. The GBP to GBP exxhange rate is 1:1. What are you converting? You're not taking your USD income and converting it to pay the government. They are paying you. In GBP. You only have to convert to GBP, at a historically low rate, to pay your current expenses that you would have to convert for anyways and now a loan payment as well. Best case scenario is you did all this and your loan payments might drop slightly due to that exchange rate improving. Which is the opposite of what your financial expert said they did this to leverage against.
That's not only not smart, it doesn't even make sense.
Let's
assume they did it at Friday's (6/23) conversion rate (about 0.79).
They could move $4,050,633, which would convert down to £3,200,000 for
an accounting loss of $850,633. Alternatively, they could take a
collateralized loan.
[...]
What? You should read the stuff you are re-posting first Furthermore to bet on a falling GBP when its at a historical down isn't a smart thing to do Edit: Especially in a Trump administration where unforseen events may occur.
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it. The cake is a lie.
How can any of you have the guts to justify a loan of any kind at this point
..especially such atrocious deal where you have to back it up by your entire IP..
If I were a backer from day one I would really want to punch CR in the face
Makes me mad even when I dont care, this is some unbeliavably immoral bullshit
Welcome to the thread.
You may want to READ the thread first and get your facts straight (e.g. "entire IP")
As a backer I consider this a smart move that makes economic sense and makes more money available for the Star Citizen project. A good thing in my book.
I have no intention of punching Chris Roberts in the face.
There are some things I consider immoral bullshit - the Star Citizen project is not on this list.
Have fun
Read the thread thoroughly, Loan is still a loan and this is an extremely risky one
Based on your posts here you would consider a smart move if CR wiped his ass with your money, your opinion is pretty much useless at this point
More money available to project - you gotta be f****ing kidding me right now
Offtopic: your "have fun" is obnoxious and toxic
I think I actually spent way more time reading and theorycrafting about MMOs than playing them
Spinning it even more, where does this whole conversion come into play? The rebate is a credit from the British government. They use GBP. Your expenses are paid in... GBP. The GBP to GBP exxhange rate is 1:1.
If I understood RSI's statement correctly, they're taking the loan so that they wouldn't have to convert their income (USD and EUR) to GBP just yet.
Since conversion fee for large companies is practically nothing, I think one has to conclude that RSI is taking this in loan in GBP because they believe investing in EUR and USD currencies will generate profits that exceed this loan's interest rate.
Why are you complaining and then telling everyone to keep it up? Make up your mind.
Both rain and sunshine is needed to make things grow.
I just watch how far narratives go to spin to sake to make something supposedly be bad and awful on a rampage of a speculative fear monger. As @Herase mentioned, it's almost damage control over CIG's statement because that doesn't fit the "SC Doomsday" Narrative. gg
Fair point. I assume that means that the majority of their overall expenses fall under the studio they put up as collateral and not the US/Frankfurt studios.
Yes, the company earns mostly in USD and EUR and has the majority of its costs in GBP.
Only in currency conversion, this must cost them millions and millions. The difference between 2015 and 2017 (at the current rate) would be of 5 million USD because of the fluctuation.
Why are you complaining and then telling everyone to keep it up? Make up your mind.
Both rain and sunshine is needed to make things grow.
I just watch how far narratives go to spin to sake to make something supposedly be bad and awful on a rampage of a speculative fear monger. As @Herase mentioned, it's almost damage control over CIG's statement because that doesn't fit the "SC Doomsday" Narrative. gg
I think that's equally as fun as people fantasizing about future game-mechanics and how amazing and ground-breaking everything will be compared to all other games in existence when everything playable right now is as banal as it gets.
Fantasies running wild in both directions yet you constantly complain about one of them. Hypocrisy much?
Fair point. I assume that means that the majority of their overall expenses fall under the studio they put up as collateral and not the US/Frankfurt studios.
Yes, the company earns mostly in USD and EUR and has the majority of its costs in GBP.
Only in currency conversion, this must cost them millions and millions. The difference between 2015 and 2017 (at the current rate) would be of 5 million USD because of the fluctuation.
Maybe I have a base thinking error here but, GBP is cheaper now doesn't that mean they where able to buy $5 million to GBP more 2017 than 2015? I mean wasn't that the argument when Erin Roberts got his payrise that it costs CIG the same as last year because the GBP dropped.
Except that Erin gave himself(or his brother did) quite a pay raise for not delivering anything. Wish I could deliver no results at my job and get a massive raise lol
What I understand from this is, as CIG works with dollars, last year the GBP had a loss of almost 20% in value, hence the company can adjust his pay by 20% at no cost. More specifically turns into a 3% proper raise. @Vrika
Money is fun, they can increase wages on UK for almost 20% at no extra cost due to the GBP devaluation, thanks Brexit? xD
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it. The cake is a lie.
Read the thread thoroughly, Loan is still a loan and this is an extremely risky one
Based on your posts here you would consider a smart move if CR wiped his ass with your money, your opinion is pretty much useless at this point
More money available to project - you gotta be f****ing kidding me right now
Offtopic: your "have fun" is obnoxious and toxic
There are many good and smart economic reasons to get a loan in business. Plenty to be found w.r.t. this topic on the Internet. And many of those reasons have nothing to do with the company being in trouble.
I commiserate someone that considers the words "Have fun" to be "toxic".
Maybe I have a base thinking error here but, GBP is cheaper now doesn't that mean they where able to buy $5 million to GBP more 2017 than 2015? I mean wasn't that the argument when Erin Roberts got his payrise that it costs CIG the same as last year because the GBP dropped.
They were able I think to save around 1.3 million in GPB in 2016 because half of the year (as the graph posted) the rates were standing in their normal values.
As I put it, if the rate stands the same, and FQ42 faces the same cost of 2016, CIG would be ~4 million cheaper to pay the same amount of GBP (at 2015's rate), 2-3million if 2016's rate.
The thing I have no idea on specifics is the exact costs that come from converting 20 million USD to GBP.
Though we don't know if they already did this before, things like the money they may have invested for the sakes of counter the currency factor (loans are just one way to do it).
Maybe I have a base thinking error here but, GBP is cheaper now doesn't that mean they where able to buy $5 million to GBP more 2017 than 2015? I mean wasn't that the argument when Erin Roberts got his payrise that it costs CIG the same as last year because the GBP dropped.
They were able I think to save around 1.3 million in GPB in 2016 because half of the year (as the graph posted) the rates were standing in their normal values.
As I put it, if the rate stands the same, and FQ42 faces the same cost of 2016, CIG would be ~4 million cheaper to pay the same amount of GBP (at 2015's rate), 2-3million if 2016's rate.
Though we don't know if they already did this before, things like the money they may have invested for the sakes of counter the currency factor (loans are just one way to do it).
I guess they didn't because it'll show up in their gov document (for GBP at least) - nevertheless those 3+mil or whatever will just buy them 1 1/2 month with unforseen outcome (this credit could cost more than a conversation, forex is unforseenable). Another thing is who pays the rates for the credit wouldn't it be CIG that pays it in $$$? Wouldn't this negate the effect in the first place ... I'm confused ...
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it. The cake is a lie.
Comments
"They could move $4,050,633, which would convert down to £3,200,000 for an accounting loss of $850,633"
Any country that uses it's tax payers funds to help finance video-game companys and create jobs for the hard working folks has my blessing and ultimate support! Gos bless the UK Gov, Coutts & Ortwin for his financial experties.
It's no wonder SA has shifted attention to them instead of the official subreddit.
The amount of batshit crazy stuff they type is very interesting
..Cake..
Loved the bit where an 850k loss appeared.
This is financial expertise. Not taking a loan counting on your currency, already at it's lowest point in 5 years, and at the bottom of a ~monthly oscillation, going even lower. Especially when the US President (or at least much of his cabinet and advisors) are attempting to make sweeping changes to the economy whilst under an investigation that would almost certainly unravel the economy if anything comes up heads. The GBP going lower against the Euro would be a kick in the teeth for Britain, but makes a little more sense in theory.
If the GBP goes up at all vs the USD or Euro then that takes away from any of the gains in doing it right now while putting your main studio and half of your game (or one of your two games, whatever) on the line to do so. It just isn't worth the risk with that collateral. Make a new jpeg to sell and offset the expected exchange rate loss instead. If there are so many new people joining every month, surely some would want an equal chance at a newly released image.
..Cake..
This is a GIANT slap in the face of all backers
How can any of you have the guts to justify a loan of any kind at this point
..especially such atrocious deal where you have to back it up by your entire IP..
If I were a backer from day one I would really want to punch CR in the face
Makes me mad even when I dont care, this is some unbeliavably immoral bullshit
I think I actually spent way more time reading and theorycrafting about MMOs than playing them
Well i dont have enough money to pay the rent this week, could i borrow some money until payday please? I'll use my car as security!
Oh SIR is a very wealthy man, and a very cunning financial operator! I bet sir could make an $850k shortfall disappear with just the smallest marketing campaign!
Well actually im shit broke and about to be evicted.
Tish and pish sir, you are clearly just looking to leverage your immense wealth in a very stylish way i think! Ill put you down for 50 quid and we will want the house if you fuck up.
You may want to READ the thread first and get your facts straight (e.g. "entire IP")
As a backer I consider this a smart move that makes economic sense and makes more money available for the Star Citizen project. A good thing in my book.
I have no intention of punching Chris Roberts in the face.
There are some things I consider immoral bullshit - the Star Citizen project is not on this list.
Have fun
So you DO think 8% of their annual income is peanuts.
Interesting rational
..Cake..
You're implying they don't need any money, yet they are using their main studio and all their single player game, plus the future revenue streams from it as collateral on a loan that, using the now default 3,200,000 GBP assumption would have netted them a savings of roughly 500,000 GBP from prior to Brexit until now. Before calculating interest in there. Less with it. It is a very short loan term so interest shouldn't be all that much regardless. I don't like sorting out compounding so I'm leaving it at negligible.
At pre-Brexit GBP levels (~1.44USD) it would take about 4,608,000 USD to get 3,200,000 GBP. Post Brexit (now ~1.22USD) it would take roughly 3,904,000 USD. The difference in Euros (~1.19 to ~1.13) is even less pronounced. To assume the GBP may drop some is fair, particularly against the Euro, but it's unlikely to drop that far again. The shock factor is gone and the markets are correcting for not much happening until 2019. It's more likely it will remain static or rise slightly depending on what the US economy does. If nothing else, technicals still play into it going up some from here.
To extrapolate those numbers down to layman levels, that's the equivalent of getting a car loan and the bank requiring you to use your house as collateral for 15% down. Unless the bank has seen the numbers and your house just isn't worth as much as your self reported numbers would suggest. Maybe you pay it off without a hitch and it was all for naught, but it still isn't a smart play.
Spinning it even more, where does this whole conversion come into play? The rebate is a credit from the British government. They use GBP. Your expenses are paid in... GBP. The GBP to GBP exxhange rate is 1:1. What are you converting? You're not taking your USD income and converting it to pay the government. They are paying you. In GBP. You only have to convert to GBP, at a historically low rate, to pay your current expenses that you would have to convert for anyways and now a loan payment as well. Best case scenario is you did all this and your loan payments might drop slightly due to that exchange rate improving. Which is the opposite of what your financial expert said they did this to leverage against.
That's not only not smart, it doesn't even make sense.
Furthermore to bet on a falling GBP when its at a historical down isn't a smart thing to do
Edit: Especially in a Trump administration where unforseen events may occur.
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it.
The cake is a lie.
Loan is still a loan and this is an extremely risky one
Based on your posts here you would consider a smart move if CR wiped his ass with your money, your opinion is pretty much useless at this point
More money available to project - you gotta be f****ing kidding me right now
Offtopic: your "have fun" is obnoxious and toxic
I think I actually spent way more time reading and theorycrafting about MMOs than playing them
Keep it up, I guess.
Make up your mind.
Both rain and sunshine is needed to make things grow.
..Cake..
Since conversion fee for large companies is practically nothing, I think one has to conclude that RSI is taking this in loan in GBP because they believe investing in EUR and USD currencies will generate profits that exceed this loan's interest rate.
Only in currency conversion, this must cost them millions and millions. The difference between 2015 and 2017 (at the current rate) would be of 5 million USD because of the fluctuation.
Fantasies running wild in both directions yet you constantly complain about one of them.
Hypocrisy much?
..Cake..
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it.
The cake is a lie.
I commiserate someone that considers the words "Have fun" to be "toxic".
Have fun
As I put it, if the rate stands the same, and FQ42 faces the same cost of 2016, CIG would be ~4 million cheaper to pay the same amount of GBP (at 2015's rate), 2-3million if 2016's rate.
The thing I have no idea on specifics is the exact costs that come from converting 20 million USD to GBP.
Though we don't know if they already did this before, things like the money they may have invested for the sakes of counter the currency factor (loans are just one way to do it).
Another thing is who pays the rates for the credit wouldn't it be CIG that pays it in $$$? Wouldn't this negate the effect in the first place ... I'm confused ...
When you have cake, it is not the cake that creates the most magnificent of experiences, but it is the emotions attached to it.
The cake is a lie.