In this paper, I wrote about three recent initial offerings, two IDOs and one IFO, which were brought to my attention. All offerings were launched on DeFi protocols acting as decentralized exchanges.
I will assess whether it is possible to take a profit either through using an option-like strategy or through participating as a market maker (more commonly known as LPs in crypto markets) in initial offerings.
These offerings, a kind of a zero-sum game, are rife with pump-and-dump schemes. While you are trying to grab a portion of someone else’s get-rich-quick scheme, seeking to sell to the next greater fool, your allegedly impermanent losses may become permanent.
A victim of the pump-and-dump scheme will be the savior of another’s get-rich-quick scheme. In the current market environment, it may seem that there is still plenty of money on the sidelines and that every dump will be followed by another pump. However, both money and time are not limitless in one’s lifetime. Understanding how these schemes are staged and unfold will save you both time and money.
Category Archives: Management Science
Valuation of cash-flow bearing long-lived assets: Focus on Real Estate Property
In this video, I will explain how to value a real estate property. The method I employ is similar to that used by investment bankers in their enterprise and equity valuations. The complexity of valuing any cash flow bearing asset lies partly in the uncertainties related to cash flows and required rate of return representing the risk profile of the asset. I will show you how to mitigate the impact of these unknowns on the valuation model. With such a tool in your hand, you will be able to make your sell and buy decisions in a more informed and accurate way.
GameStop (GME) Part 2: Concluding remarks on GameStop: Further fact checking and demystifying illusions they want you to believe in & Lessons learned for retail investors
In this paper, I will share some additional facts helping you understand why GME case was hardly a landmark in the financial markets. Similar phenomena happened in the past and it is very likely that they will happen in the future. However, GME case is significant in that it has presented great lessons ranging from how to expect and spot financial irregularities and how to manage your risk capital to recent digitization in finance and its ramifications for retail investors.
GameStop (GME) Part 1: Financial Mechanics explained
In this paper, I will explain why such a pricing irregularity concerning the value of the GameStop’s stock happened and it happened fast although the buildup was manifest to the trained eye. Obviously, GameStop may not be on your radar considering the current state of the company, the size of its market cap and shares floating, and disruptions faced by retailers alike; however, the financial mechanics here are relatively complex and understanding them will make you more prepared for similar cases that very likely will happen in the future.
In the 2nd part of this series, against the backdrop of part 1, I will elaborate further on lessons that must be learned by retail investors and how this saga may end.
Valuation of stock options: Will Black Scholes hold in real life? Company in focus: GameStop (GME)
Black Scholes is claimed to be one of the most important valuation tools in finance. However, will it really hold true in real life? A real world analysis on GameStop
Mission Statement
Selim is here. After a career in high tech and automotive, I decided to launch my own company at which I would utilize my expertise to the fullest, together with a great sense of self-fulfillment while also providing measurable and tangible value to everyone willing to grow and develop. Intended to reflect my education and …