Wednesday, August 5, 2009

eRepublik Letter from the Chairman - Week 1

Greetings to all investors in SRM Holdings.

Comrade Arms was officially opened for business on Day 619, after the completion of contract and receiving investment from enough investors to get the ball rolling. One original investor did not complete the contract and submit his investment of 5G, but 2 more shares were subscribed, giving a total of 19 shares outstanding. When possible, 5% of profits will be paid out per share, instead of 4%, to bring all investors to 1.15G return as quickly as possible.
Contributions from MasterGerund made it possible to start Comrade Arms, even though only 19G was invested, and dedicated purchasing of weapons got the ball rolling on the first day.

There are a consistent 10 employees, paid reasonable wages, with wellness above 90. MasterGerund is hired each day for 2USD and then paid one weapon after working. He is then fired, so the other 10 employees can work at maximum productivity, and rehired the next day. His first three days, the weapons were withheld, and then paid after Comrade Arms reached comfortable iron levels and had sufficient working capital in place for wages.
Comrade Arms strives to maintain cash at 50USD and iron levels at 200 units, which is enough for about two days operations. Cash above that is withdrawn to SRM Holdings and accumulated for dividend payouts.

Dividend Declaration:
Dividend payouts from week 1 will be 0.15 per share. It is hoped that week 2, which will be paid out on day 631, will be higher, as it will be a full 7 days, whereas week 1 was not a full 7 days.

Market conditions:
The price of weapons in the eUSA has fluctuated somewhat, but most inventory has been sold at a price of 7.60 (after tax price of 7.98.) Remaining inventory on day 624 was sold at 7.52, so that iron levels could be restored and profits withdrawn. This decline in the selling price of weapons is somewhat offset by the decline in the purchasing price of iron, which has decreased over the last four days from 0.89USD per unit (Q4 iron) to 0.81USD per unit (Q3 iron). This is a decline of about 0.40USD per weapon. Wage rates have also declined somewhat in the last four days, and Comrade Arms has been able to get a full staff of highly profitable workers.

Thank you everyone for your support.

SRM Holdings

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