LBI Value Up 60.21% Annualized

almost 3 years ago

LBI is nearing the completely of its 5th month of operation. The start to this fund is absolutely incredible. It was modeled after @spinvest but compared to the start of that, this project is in the express lane.

Obviously, we saw a tremendous amount of activity to start the project. It was long anticipated resulting in a large number of tokens being bought the first few weeks. This helped to really put LBI in a strong position as a curator, generating a significant amount of revenue each week that carries through to this day.

During the last earnings report, we see that the projects has generated over 21,000 worth of LEO since inception in early December. Even with the pullback in the price of LEO, this is a fair bit of revenue.

Of course, that is only the tip of the iceberg. We also saw a number of other aspects that fed into the value of the LBI token. The chart above shows how the pace has moved since we started.

It does appear, which makes sense, that the acceleration is increasing over the last month or so. This is in alignment with what is taking place considering the introduction of CubFinance and LBI's involvement in there.

Since that kicked off, we find this to be a terrific stream for the project. Each week, we see the value of LBI moving higher. This is allowing for the prospect of even more projects, furthering the flow into the fund.

This is the simple premise that LBI was built upon. Over time, as more projects are engaged, we can see the streams of revenue expanding. This will help to advance the value of the token by increasing the holdings that back the token.

Here is a good place to mention that we are closing in on the end of the direct token sales. In the next couple days, that ends. What that means is the only place to purchase the token is the open market. Thus, the pricing will be completely determined by those participants.

The charts we show are based solely upon value. This is determined by adding up all the assets and dividing by the tokens outstanding. Pricing is free floating now since the token is traded on Hive-Engine yet it could be hindered by the direct sale.

That will no longer be the case. Does that mean the price will go up?

This is impossible to forecast until it happens. However, if we look at the banking industry, perhaps we can get some idea.

When we look at book value, which is common in the banking industry, we see that it is simply a totally of the asset base. That tells us exactly what the bank is worth. Then it is compared to what the stock is trading at.

Banks rarely trade at book value. If they do, that means the shareholders are paying exactly zero for growth. We know that there is some type of premium usually paid for that since no seller is willing to give future growth away for free.

It is why banks typically trade at a multiple of book value. Traditionally, if you can pick up a bank for a price under 2x book value, that is a good buy.

What does this have to do with LBI? We can look at the value of the assets as "book value". It is the total we could get if everything was sold off. Of course, this is based upon the pricing at the time of the accounting. Markets are continually changing. That is why accounting is just a snapshot of where things are at a certain point in time.

With LBI, we have our "book value". Now it is just a question of what the token will trade at based upon that. Will it be 1.5x? 2x? .75x? Nobody knows.

Since we know the value of the holding, we can also compare that to the growth rate. Thus, far, the value of LBI has increase 22% in just under 5 months. On an annualized rate, that is growth rate of 60.21%. In the traditional markets, that is considered an enormous rate of growth. That said, we have to keep in mind that we are dealing with much larger entities there.

So basically we are looking at a fund with a "book value" of 1.22 LEO per token that is experiencing a 60.21% growth rate on an annual basis.

What is that going to sell for on the open market?

That is the question that is clouding the ole crystal ball. Will buyers and sellers on the market look at things from this perspective? Also, will there be a premium or a discount because it is trading in a low liquidity environment? Certainly this is going to factor in somehow.

Markets will do their thing. In the meantime, we can only focus upon growing the value of the assets back LBI and making sure the growth rate exceeds the targeted 20% annually. So far, we are proceeding nicely in that area.

Growth rate is 52/19 x 22%

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LBI Value Up 60.21% Annualized

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