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In Mystik’s post, she suggests that perhaps shareholders should be reimbursed from the VSTEX risk fund. Samantha Goldflake, (not Goldnugget as Mystik calls here), points out that most of the funds in the risk fund are to come from successful IPOs, which VSTEX, being a new exchange, doesn’t have any of yet. She notes that since SLC came over from a different exchange, there was no IPO and hence, no IPO funds from them in the risk account. The other source of funds for the risk fund is a commission taken on stock sales. Unfortunately, I cannot access any data on SLC stock sales, but based on other data that I can find, my rough estimate is that around L$ 25,000 of SLC stock traded hands each of the fifty days it was on the market. With a 0.5% commission going into the risk fund, that works out to be about L$ 6,250 available in the risk fund for SLC shares. With around 2.5 million shares on the market, not counting the directors’ shares, that works out to be about a quarter of a Linden cent per share.
On the other hand, Samantha Goldflake claims that Mystik withdrew L$ 333,896 from VSTEX, or about L$ .13 per share. This seems to fit with Mystik’s apparent approach to dealing with finances. She ended her post by noting that “Well, the new CEO needs only distribute those shares as an option to an alt and dump them on market.” It appears as if Mystik’s approach is to search for ways of beating the system instead of finding ways to maximize shareholder value.
VSTEX appears to have worked hard to salvage a bad situation. If they are lucky, Mystik will act honorably and return the L$ 333,896 that she withdrew and they will find a shareholder of SLC similar to Monkey Canning who has stepped up to salvage Atlas Venture Capital. If not, they may need to dip into their risk fund and pay each stockholder something like L$ .0025 per share.
For some people, trading will remain part of a game in Second Life, where the Linden dollars earned are simply part of how you keep score. For others, it will remain a real market with real money and real risks. Given the pseudonymous nature of Second Life, these risks are likely to remain high, but the exchanges will continue to work to bring about new rules to mitigate some of these risks. As long as you carefully monitor our own risk portfolio, trading in Second Life is likely to remain a fun and potentially lucrative game.
Update: Based on data that a reader has sent me, it appears as if my estimate of L$ 6,250 in the risk fund was very optimistic. It appears as if about L$ 200 was added to the risk fund based on SLC trading during the month of October. Extrapolated out, that works out to be around L$ 560 during the history of SLC on VSTEX. However, SLC was trading at a higher price, and probably a higher volume during its initial days, so L$ 560 is probably the low end, and L$ 6,250 is probably the high end of funds available in the risk fund.
Back in February, I wrote a blog post entitled Pursuing the elusive micropayment. I talked briefly about the different systems for making payments from your cellphone. One company I mentioned was Obopay. Earlier this month, I mentioned that Obopay was setting up an agreement with the Second Life Capital Exchange (SLCapEx) so that people could withdraw Linden dollars as U.S. dollars via Obopay. I noted that the transaction costs seemed particularly high for micropayments and wondered where things would go.
The other day, I received an email from another company I had written about, Textpayme. Their email starts off with “TextPayMe service is now powered by Amazon Payments!” It will be interesting to see where that goes.
Today, I received an email about a great new application for Facebook, the Second Life Link. So far, only about a half dozen of my friends that are in both Second Life and Facebook have signed up. However, it is great to be able to check the page to remember the association between real life names and Second Life names. If you’re in Second Life, please consider adding this app.
Second Life was having some currency exchange problems that have been fixed and now their having a rolling restart of their servers.
InWorld Studios is continuing its Virtually Speaking series this evening with Jimbo Hoyer interviewing John Dean. Should be good.
Cracked Ice is having a CD Release party in Fairfield. More information can be found here.
In late July, L$ 3.2 million was fraudulently taken from the World Stock Exchange by people involved with Mystik Designs (MDS). That is around $12,000 in U.S. currency. Mystik Boucher, and the chairman of her board, Thurston Hallard both had their accounts suspended and the remaining assets held. Boucher was later cleared as Thurston Hallard and Mindo Pinion, an account which many believe was controlled by the person that controlled Thurston Hallard’s account both disappeared.
As a result of the fraud, Mystik decided to move her company from the World Stock Exchange, and set up business over on the Virtual Stock Exchange, (VSTEX). In the process, she merged with Bob Perry’s Store (BOB) and SL Zero (SLZ), both controlled by Bob Perry.
A month later, rumors circulated that Mystik Boucher had disappeared. Mystik responded with a blog post on Your2ndPlace, where Bob Perry also posts starting off by stating, “Bob's post on Vstex (had anyone researched this) was a blatant lie.” That doesn’t look like a good sign for the heads of the merged company working together.
Sure enough, two days ago, VSTEX announced a halt on trading of SLC, the joint venture between Bob Perry and Mystik Boucher. It includes a message from Bob saying,
After contacting Mystik in the last 2 days, I have ultimately discovered she will not work with me. I was cursed at and told she was never given any work.
I now believe that we will no longer be able to work together.
I would like to tell you that I am now resigning and leaving Mystik in charge. My shares can be removed by vstex if felt necessary but I no longer feel like I am working with a responsible partner. I am leaving her in charge of the company.
It took a month for Bob to figure that out? So now, SLC trading is halted. VSTEX did the right thing to halt trading and to try and figure out what is going on. Incidents like this are bound to continue in Second Life trading. Running a small business is hard enough. Running it virtually brings in all kinds of additional complexity. The real test will be to see how well Mystik Boucher and the Virtual Stock Exchange work together to salvage this.
It appears as if VSTEX has been working hard behind the scenes to make find ways for SLC to continue operations. Initial indications are that they have worked with Mystik to resolve this and that trading in SLC will resume soon with the shares that had been Bob’s being transferred to Mystik.
VSTEX is also rumored to be setting up new rules for the listing of companies, and hopefully for how they handle the halting and resumption of trading. These rules could require different types of markets for different types of companies, larger, well established and well regulated companies, less closely regulated startup companies, or perhaps, in the future, companies that don’t operate primarily in Second Life.
Trading in Second Life continues to be a fascinating area for anyone interested in the emergence of trading practices in any community. The actions of VSTEX and Mystik Boucher provide continued hope that the markets will evolve to be an even more valued part of the Second Life environment.
A recent article about students receiving suspensions as a result of comments on Facebook has caught my attention. I have been following a similar case in Connecticut, where Avery Doninger wrote criticism of her school administration using derogatory language in a Livejournal post. She was barred from running for re-election to class office and her case is now pending before the U.S. Second Circuit of Appeals in New York. You can read details about the case in the Connecticut section of my blog, Orient Lodge.
While I am particularly concerned about the issues of freedom of speech, due process and equal protection, I am also very concerned about the pedagogical interests and the teachable moments. The reaction of the school administration in Burlington, CT provide a great example of what, as a member of the board of education from a neighboring town describes as an illustration of “what administrators ought not to do”.
Unfortunately, the article that I read is lacking on details, so it may be that you are acting much better, or much worse than the Lewis S Mills school administration.
The article starts off by stating that “A video posted on Facebook of two high school students fighting at West Lafayette High School, Ind., prompted suspensions earlier this week.” Suspending students has always seemed to me to be a very harsh punishment, one that should only be used as a last resort. The article doesn’t detail what led up to the suspensions. Were the students spoken with about how inappropriate it was to post the video on Facebook? Were other measures attempted to take this and find a teachable moment, or did the administration move directly to punishment?
Defending a suspension where pedagogical approaches to the issue were attempted first and where the message online can be construed to support illegal activities, such as the fight may have been, is much easier than an arbitrary suspension that many see as an effort to curtail students free speech.
This gets even more complicated when you look at Caitlyn Casseday’s statement to the press. While obscenities are not normally the best method of furthering critical discourse, to use the words of Avery Doninger, there is a very big difference between what one ought to say, and what one is permitted to say, and, at least based on the newspaper reports, the school administrators at West Lafayette High School seem to have made a similar mistake as those at Lewis S Mills High School in Burlington, CT in differentiating between the two.
The article goes on to say that “A code of conduct, posted on the school district's Web site, does not directly address postings on the Internet, but does say existing rules about conduct apply both on and off school grounds.” Yet this seems to run counter to the famous Tinker v. Des Moines decision with the famous line, “It can hardly be argued that either students or teachers shed their constitutional rights to freedom of speech or expression at the school-house gate”
The article ends by noting that “Students are calling for this Friday to be ‘Free Speech Friday,’ and they are planning to wear white T-shirts in support of the suspended students.”
Part of the legal issues that the Lewis S. Mills school administration faces is their confiscation of T-shirts about free speech. Let us hope that the administration at West Lafayette High School doesn’t make a similar mistake.
A key standard in issues of students’ free speech revolve around whether the speech would substantially disrupt the pedagogical interests of the school. In the Lewis S Mills case, it appears as if it isn’t the students’ free speech that is substantially disrupting the pedagogical interests of the school, it is the reactions of the administrators. Let us hope that the administrators at West Lafayette High School can learn from the mistakes here in Connecticut.
So, if I were a school administrator in West Lafayette, what would I do? I would grab this teachable moment by the horns. I would have a school assembly where I addressed the issue head on. Ideally, I would schedule it for Friday and congratulate all the students that wore white T-shirts for struggling with what their rights really are.
I would bring in a constitutional lawyer to talk to the students about exactly what their rights are and make sure that they learn about cases like Tinker, Fraser, Hazelwood and Morse. I would also have someone trained in conflict resolution talk about how fighting is not a good way to resolve conflicts and putting a video of a fight online is not in the best interest of anyone. This could even set the stage for avoiding costly legal fights like we are seeing in Connecticut. I would have an English teacher speak about how to use language that is not offensive and even more effective in getting ones point across.
With all of that as groundwork, I would then invite the students to teach. It could be a valuable teachable moment. The other option, which also provides many valuable teachable moments, is watching the case spiral out of control as it works its way through our countries legal system.
I hope that you make wise decisions for your students.