Peering Into The Depths of Ginko Financial (Updated)

Update: It has come to my attention that, apparently, the quoted figures in this article are actually from Sun Jun 03, 2007 9:48 pm on the Ginko website. Thus, some sections are edited, and the older content will appear as strike. Apologies, as I thought Sarah's post was based on fresh information.

The issues of Ginko Financial continue. This is not new news, but for some people it apparently is becoming news as they check in. One has to wonder where these people have been... but they do come in.

To their credit, some apparent volunteers from GinkoTec have been helping explain things to people. Forepawz Golem and Craig Solzhenitsyn have been doing this, and Hinoserm Rebus (who sent out this explanation) has also been at the ATM as well - explaining things to people who are inexplicably new to this situation. It would probably be easier to give out notecards, but that lacks a personal touch and might make matters worse. As human beings, they deserve some respect - even with so much anger directed at Ginko Financial itself. Day in and day out, they seem to be around... though at the time of this writing, they all appear to have gone to get some sleep.

Of course, that doesn't mean Ginko Financial doesn't have things to answer for.

My last interview with a Ginko ATM, at 4:53 p.m. SLT, gave me this:

Ginko Financial ATM: Currently processing number 297 of 3324. (L$38,830,107)

While the facts and opinions of people have been well expressed, and Benjamin Duranske (VirtuallyBlind.com) continues to point out that it looks like a [w:ponzi scheme].

All of this had me poking around a bit. If you recall, Sarah Nerd posted Ginko Financial's disclosure of investments on July 30th, 2007 (but apparently originally posted on June 3rd). I decided to dig into that deeper. From the disclosure:

First, the overview. Our current stock portfolio, excluding halted companies (MPR) and subsidiaries (GCS and VME), consists of the
following:

- 10,818,978 shares in BNT (Brautigan & Tuck Holdings) which has a 30-day average value of L$10,494,408.66.

- 6,773,393 shares in HCL (Hope Capital Ltd) which has a 30-day average value of L$19,846,041.49.

- 1,329,132 shares in LOT (Lotto Networks Unlimited) which has a 30-day average value of L$1,143,053.52.

- 624,570 shares in KCG (Kavai Conglomerate Group) which has a 30-day average value of L$6,913,989.9.

- 473,350 shares in EFM (Empire Fund Mutual) which has a 30-day average value of L$421,281.5.

- 55,395 shares in AIC (Allenvest Investment Capital). I am unsure what the average is, but it has a market value between L$55,395 and L$110,790.

So, let's see what there is now - and do so with the understanding that there may be sell orders in place.

BNT could not be researched, since the Allenvest has no major shareholder information available. However, the past week's volume on the BNT page shows only 231,185 shares have been traded over the past week. Even if all of that were to have been sales by Nicholas Portocarrero, that still puts substantial holdings in BNT - on the order of over 10,000,000 shares.

HCL: Present Ginko holdings are now 9,000,001 shares. This means that 2,226,607 shares were bought between July 30th June 3rd and August 6th, when the deposit issue was already known about. This is peculiar, to say the least - 2.2 million shares does seem like a dubious investment while one's bank is not able to permit withdrawals outside of a queue. It is odd that no shares have been sold.

LOT: 1,067,286 shares are now owned by Ginko, which means that 261,846 shares were sold. The last sales that Nicholas Portocarrero made were on July 28th, 2007.

KCG: Shares at this time are 617,777, which indicates that 6,793 shares have been sold by Ginko.

Empire Fund Mutual? Couldn't find it at all in search under classifieds or places. AIC's balance is simply private information.

What can be seen here that the overall investment over the last week has vastly outweighed the liquidation. I'm no expert, but... shouldn't a bank trying to become more liquid not invest? But we'll get back to HCL in a moment.

What can be seen here is that there has been no apparent liquidation - only an increase in assets since June 3rd.

But with Ginko Currency Services? Nicholas Portoacarrero has been having some success selling - and at present owns 9,272,448 shares of GCS.

Ginko Perpetual Bonds (GPB) doesn't have Nicholas as a major shareholder, so there's no way to tell whether there has been some liquidation there.

A Coincidence?

But there is something in common with HCL, GPB and GCS. Nicholas Portocarrero is the major shareholder in HCL - which, by proxy, puts him heavily invested in WSE. And guess who is listed on GCS and GPB as a Non-Executive Director? Lukeconnell Vandeverre, the CEO of HCL.

Is it a coincidence that these two names have been coming up a lot in the timeline since the WSE was 'hacked'? Doesn't it seem odd that when Nicholas Portocarrero is having trouble raising enough money to handle withdrawals that he would be investing in Hope Capital?

What's going on here? I'm not saying anything - but there are the facts right there. How do we explain these facts?

The Future of Ginko Financial

I always root for the underdog; it's an emotional response. Fortunately, I'm not very good at emotional response (I have references), so when I get past that - as brief as it has been - I have to ask why Benjamin Duranske is not right. I can't find anything which demonstrates otherwise, and the link to the WSE is not helping matters.

I've stood by my thoughts that the WSE's problems were related to Ginko (being down for a week after money was misappropriated, then the site was upgraded) because I thought this had affected Nicholas's ability to trade and rebuild the float during that time. But the indications of the trading do not support that theory The lack of explicit trading does not support this. - in fact, the investment in HCL during the same time while rebuilding the float are somewhat disturbing. What's really going on? And what is the role of Lukeconnell Vandeverre in all of this?

Update: See also Ginko in Death Throes