DCUs - A Profit Story

I wanted to do a write up on this for a while, but much to my suprise, this market just kept and kept on giving. Anyway, time to share with you another profit story...

Drone Control Units:

DCUs are one of many cap mods I manufacture for the Jita market. Like other cap mods, it is vulnerable to 'thin markets' as they take a long time to build. A run of 10 takes a week or so to build in station so if supplies run thin, it can take a long while for manufacturers to meet demand.

So... it is a market I often abuse. Normally when I buy up stock and relist, the massive margins only last a small while before another trader notices the margin and sources stock, or a manufacturer dumps a load onto the market at much lower margins that isn't attractive for me to buyout. On average, I have a sales window of maybe 12-24hrs before this happens.

Well, with the DCUs... its been over ten days now...

The opportunity:

A week or so ago, I noticed a thin market on DCUs which were priced around 61mill (note: build cost was around 60mill). So I pounced and bought up underpriced stock:

I relisted this stock with some I had manufactured myself.

32 mods - thats a lot of stock. I went to bed and expected to sell maybe 10 of those mods. To my suprise, by the following evening, all 32 had been sold (~480m profit). I even caused a nice bump on the market graph:

 Cool I thought, lets list some more I had built:

And so for the next few days this continued (note how little stock is available). The 15mill markup over build cost remained. If manufacturers had noticed, then it would take them several days to produce stock so I continued to make the most of the lack of supply:

After a few days, it seemed that the new price point I had set had stuck:

Hrmm, I thought, what now?

Well lets take it higher shall we!

So I moved up the price another 10mill. Very reasonable.

And it's been sticking too! Recently the price has trended down to around 81mill, but lets see how long I can keep it up... :)


A recent market graph:

Thanks for reading o/

cheebs


1 month later: Supply has built up driving prices down and the excellent margins have finally collapsed. Nevertheless, over the course of the past month, I sold over 140 DCUs at an average profit margin of ~14mill. It was a fun manipulation.

The Result:

BPO Sale

WTS:

Capital Propulsion Engine BPO - ME50 PE10 - 1.25b
Capital Armor Plates BPO - ME50 PE10 - 1.25b
(or 2.4b for the pair)

Harbinger BPO - ME60 PE20 - 460mill 

Shield Boost Amp II BPO - 18b




If interested, please a comment here with a name to contact, or post in my FHC thread. 


Also, I am interested to sell a fully fitted Nyx:

It also comes with 20 fighter bombers, fuel, a lot of comedy items in cargohold (champagne, hookers and blow!), also has a remote shield rep + cap trans in corp hanger, as well as a travel fit, a faction TP, a syndicate cloaking device and other tasty bits. 


Looking for 28b








Thanks o/

Month 1 Profit Report

So its been 1 month since I've kicked this project off and I thought I would provide a quick snapshot as to the finances of FCV and how your invested ISK is doing.

So, without further waiting, here is the Month 1 finance snapshot:

To clarify:
- 'Cash' section represents liquid ISK that is held in the corp wallet at the moment of the snapshot.
- 'Market Orders' represents the ISK value of all current buy/sell orders
- 'In Build' represents the build cost value of all items currently being manufactured
- 'Assets' represents the value of build materials (minerals, components) as well as the value of the tower reaction chain (i.e. the towers/silos etc) and their inputs

Summary:
The profits for the 1st month come in at a little under 7bn and represents an increase in the value of FCV of 8.74% (80bn --> 86.99bn).

Discussion: 
The profit for the month is very modest but was in line for what I expected from Month 1. It took 2 weeks for all of the FCV shares to be sold and there were delays to getting the build jobs going. Getting 20bn+ of build jobs started takes some fine tuning and it is only in the last week or so that I feel that things are finally up and running properly. Now that they are, and I have gotten used to the running of the reaction towers, I hope for double digit % growth for the next month.


If you have any questions, feel free to comment on this blog or post in the FHC thread.

o/ cheebs

How the share sale ended up

As we approach the 1 month mark of this project, I thought I would make an update on what funding was finally accepted by FCV and how that ISK has been put to work. 

This venture was started because while FCV was asset rich, it was also cash poor, and like many companies, needed funding to make use of its assets and to start making some money. 

Before the share sale began, FCV had the following in cash (ISK) and materials (mins and t2 components):

Cash: 3bn

Materials: 10bn

Total: 13bn

Then the FCV share sale began. Initially, 30 shares were sold to 1 corp and an additional 40bn sold to individual investors for a total of 70b. One investor asked to buy back some shares rather promptly as he actually needed the ISK, and so the final number of shares sold was 67, raising 67bn of capital. While the original goal had been 100bn, this smaller share sale still allowed me to get my projects underway. In hindsight, 100bn was a nice round number but had I raised that much, the final returns on investment would have been less as I am not sure I could have put all that ISK to use. In any case, after the share sale, FCV's books looked like this:

Cash: 10bn

Reaction Towers: 45bn

Materials: 25bn

Total: 80bn

The heavy investment in Reaction Towers was the result of a unique buying opportunity. My former corp was selling off an already running tower chain and I bought it off them, given that I had experience running the towers anyway. Between the reactions, some market trading and my own T1/T2 manufacturing, this meant that FCV's income streams would be nicely diversified should one of them be disrupted. 

As we approach the one month anniversary of this project, I will be posting some updates on how much ISK has actually been made. While my activity will vary over the summer, hopefully this will provide some indication on the sort of returns we are expecting from this project. 

Till then o/