Dementropy posted:

Dementropy posted:

Colostomy Bag posted:

I guess the nature of this loan is going over their heads. Companies take out loans all the time. Have a product you think will be ROI of 10% but the interest is 5%? Win-win for both the company and the bank. Difference is most companies don't put their whole loving outfit on the line as collateral.

I would eventually like to see Uncle Derek start a Kickstarter to buy the assets for pennies on the dollar after it all collapses. That would be the ultimate outcome.

shrach posted:

There is something to this idea when you consider a single year. I think fundraising year to date is about $11m? And they probably expect to raise ~$36m each year. I think in the previous year the six month split was something like 12/24m in the two halves. The problem is when you consider multiple years. To get into a position where they would need a working capital loan. If you have revenue of $36m per year and you had reserves that are now depleted, you must be spending more than that.

If a loan was a genuinely good idea, why wait until "x" years in before getting the loan? How much backer money are they happy to spend on servicing the borrowing?

If you're scrambling for good news, it would be that this will prolong the eventual collapse somewhat. However, when the collapse comes it will be harder to dream about the community finishing the project with all the code and assets released into the wild, since it will all belong to the bank. There's also the hilarious possibility of a rogue indie developer buying the whole lot from Coutts for a fiver.

quote:

I don’t care how they spin this, or what backers choose to believe, this is a very – very – bad and eye opening event that just happened. If the largest studio associated with this project now has two loans – secured against all its worldwide assets – and tied to the parent holding company (hence the two charges), it stands to reason that the US parent company 1) can’t secure additional investors, which is always preferable to taking out secured loans 2) is probably either saddled with a pre-existing debt load, or it can’t get a loan – or it would have taken out the loan, then continued to fund the studios as it has been doing (as per the UK financials).

It also means that with a $152 million liability (to backers) for products they have yet to deliver, whatever this loan is, couldn’t be any substantial amount or it won’t have been taken through a subsidiary company that has no tangible assets (other than hardware, furniture etc) or income (it is funded by the US parent – as a separate studio).

So, a crowd-funded project that needed $5 million, six years later has now burned through $152 million (assuming the funding chart is accurate), investor money, and has bank loans. And there are now two. Which means that this second loan wasn’t big enough to pay off the first loan. Which invariably means that they need both loans. And they can’t take out any more loans because the second loan has now tied up ALL the company assets as security.

They have failed to ship ANY project, even after raising ALL this money. And there is NOTHING that currently shows that they can do it even if they raised another $150 million.

The fact that they are taking out secured loans, means that backer funding is insufficient to continue operations. So that means they now rely on that same backer funding to not only fund operations, but to also pay these debts. So how are they going to do that in the long term, now that they are saddled with debt, for a project that was said to be fully funded.

So instead of being accountable to a publisher, or to backers who funded them, they are now accountable to investors and bankers. And these banks now own ALL of the CIG/RSI assets, of which the Star Citizen IP is the primary and most valuable.

They’re screwed. It really is that simple.

If responsible backers and investors don’t start screaming (they will need attorneys for this) at CIG and holding them to the ToS wihch promised the release of financials, then they only have themselves to blame for the end result.

shrach posted:

So it seems they ran out of money. But there is a good news. CIG uk has taken out a (presumably) big old loan, which you can take a look at on their filing. They have split the terms with F42 so you can read it in their filing too. The collateral for the loan? Everything. All game rights, recordings they've made including music, future tax credits, any insurance policies they've taken out. Any agreements they've made with anyone else (sponsors, membership fees). It's section 4 / 5.

It doesn't list the amount of the loan but I would assume with that security it is a substantial one.

https://beta.companieshouse.gov.uk/company/08815227/filing-history
https://beta.companieshouse.gov.uk/company/08703814/filing-history

Colostomy Bag posted:

I guess the nature of this loan is going over their heads. Companies take out loans all the time. Have a product you think will be ROI of 10% but the interest is 5%? Win-win for both the company and the bank. Difference is most companies don't put their whole loving outfit on the line as collateral.

I would eventually like to see Uncle Derek start a Kickstarter to buy the assets for pennies on the dollar after it all collapses. That would be the ultimate outcome.

MinorInconvenience posted:

quote:

big nipples big life posted:
To bank with Coutts you must have at least £1,000,000 in tangible assets and in any event they are selective about their clientele; which implies CIG is doing well.

It is a good sign. They wont get a loan if they were in bad shape.

This actually raises an interesting point. Coutts & Co isn't really a bank to business, but a bank to high net worth individuals. How much you wanna bet Croberts' personal assets are also on the line...?

A Neurotic Corncob posted:

https://www.reddit.com/r/starcitizen/comments/6j77lq/300_and_global_progress_watch_update_20170623/djcdirr/

D_Smart posted:

Yes, that's my analysis as well.

Also, I have a new article up now

https://twitter.com/dsmart/status/878642386351665153

Space Crabs posted:

i guess you can put a price on ten thousand hours of lovely motion capture footage of people mopping floors and eating lunch

beautiful fatman posted:

I can't wait for it to come out that the massive loan was for like 3 million and a packet of crackers.

Tijuana Bibliophile posted:

Wow, it really has been six months since the last patch. I'm happy though, because any delays mean we're getting a better patch in the end

peter gabriel posted:

Star Citizen, proudly sponsored by Wonga.com

A Neurotic Corncob posted:

https://www.reddit.com/r/starcitizen/comments/6j77lq/300_and_global_progress_watch_update_20170623/djcdirr/

shrach posted:

I can't seem to find the thread on r/starcitizen anymore, it seems to have vanished? I had to use my history to find the page, that's normal I'm sure?

Colostomy Bag posted:

How's your skull?

shrach posted:

I can't seem to find the thread on r/starcitizen anymore, it seems to have vanished? I had to use my history to find the page, that's normal I'm sure?

Cao Ni Ma posted:

Star Citizen: The Shame Was Palpable

boviscopophobic posted:

Does anyone else think this is just a short-term loan to get them through to the release of "3.0"? They probably figure to repay it with huge whale revenues from Gamescom, Citcon, and the anniversary and holiday sales.

Virtual Captain posted: