The Matter of [Hoorenbeek]

[Hoorenbeek](HBK) is a reputable clothing and accessories company that is publicly listed on SL Capital Exchange (“Capex”). As a fashion enterprise, HBK has performed remarkably well since opening its IPO last October. As a publicly listed company, HBK has become a hotbed of investor concern.

The controversy surrounding HBK follows a February update posted by Limer Fredikkson, an avatar shared by Ansor Hoorenbeek and Pilgrim Nordwind. The update announced that HBK would withhold dividends until its monthly income could sustain a 400,000L$-apiece salary for Hoorenbeek and Nordwind. Though the update concluded by assuring shareholders that Fredikkson would return to field the expected questions and concerns following such an announcement, this never occurred. In the months since HBK's decision, there has been a complete lapse in open shareholder/company communication.

HBK share prices have experienced a downward trend that bottomed out at .18L$ towards the end of May. Whether to blame the withholding of dividends, the lack of communication, some combination therein, or none of the above, is debatable. Rumors have abounded and answers seemed nonexistent. When Fredikkson posted HBK’s May financial statement, the lack of renewed inquiry on the company’s exchange forum seemed a good opportunity for a credible, talented, and well-meaning Y2P writer to jump in and ask a few questions.

But Nobody Fugazi was busy, so I did it instead. After sending a notecard to Hoorenbeek and Fredikkson, I embarked on an analytical journey that yielded a 3-page report. About two hours ago, I was performing a last minute grammar check of the results –which had been pasted into the Y2P buffer- when I received an IM from Hoorenbeek. In lieu of a report that will join my rapidly growing collection of unpublished articles, please find my unedited conversation with Ansor Hoorenbeek below or here.

[15:09] Ansor Hoorenbeek: hi
[15:10] Ansor Hoorenbeek: regarding to your notecard, the salaries go to my partner and i
[15:10] Konner McDonnell: Hm.
[15:10] Konner McDonnell: Did you speak with shareholders before naming the 400,000L$ salary cap?
[15:11] Konner McDonnell: rather, deciding on it.
[15:11] Ansor Hoorenbeek: we decided to do it, as we explain in our post because we are working here
[15:12] Ansor Hoorenbeek: besides, we told shareholders about that in our first meeting
[15:12] Konner McDonnell: Do you have a transcript of that first meeting?
[15:12] Ansor Hoorenbeek: not really
[15:13] Ansor Hoorenbeek: we invited all the shareholders, but only a few showed up
[15:13] Konner McDonnell: That seems to be the trend nowadays. When was the last shareholder meeting?
[15:14] Ansor Hoorenbeek: that one
[15:14] Ansor Hoorenbeek: the first one
[15:14] Konner McDonnell: Why haven't there been more?
[15:14] Konner McDonnell: And why wasn't there one to explain the 400,00L$ salary increase?
[15:15] Ansor Hoorenbeek: because when we invited all the shareholders, only a few showed up, and then we started to work a lot here... and we can tell about our activities over the forum
[15:15] Ansor Hoorenbeek: there is a full explanation on the forum
[15:15] Konner McDonnell: True, but there hasn't been any investor-HBK interaction since you posted that announcement in Feb.
[15:15] Ansor Hoorenbeek: many of your questions are there
[15:16] Ansor Hoorenbeek: well, we were very busy, and as you can see we are always open to chat inworld
[15:17] Ansor Hoorenbeek: but our primary goal is to work for the company making products, improving the sim, the shop,etc
[15:17] Konner McDonnell: So why did you guys list on Capex?
[15:17] Ansor Hoorenbeek: because arb and bogart told us to do it... many, many, many, many, many, many times
[15:17] Ansor Hoorenbeek: =)
[15:18] Ansor Hoorenbeek: and seemed as a good idea.....
[15:19] Ansor Hoorenbeek: now, we are working to create something bigger.. you can see our numbers.... we are growing month by month...
[15:19] Konner McDonnell: Yes, but shareholders aren't seeing any piece of that.
[15:19] Ansor Hoorenbeek: not yet
[15:19] Ansor Hoorenbeek: but they will see it
[15:20] Ansor Hoorenbeek: rome wasnt build in one day
[15:20] Ansor Hoorenbeek: =)
[15:20] Ansor Hoorenbeek: neither do we =)
[15:21] Konner McDonnell: True. But many CEOs choose to let their companies grow slowly, earning their portion of dividends and when the company reaches a point where it can sustain their RL expenses, they make their SL business their primary source of income.
[15:22] Konner McDonnell: Witholding all dividends without speaking with shareholders and not returning to speak with them since you posted that decision seems problematic, wouldn't you agree?
[15:22] Ansor Hoorenbeek: maybe you are right... but it was (and it is) a little more complicated
[15:22] Ansor Hoorenbeek: at least for us
[15:22] Konner McDonnell: Would you mind explaining?
[15:24] Ansor Hoorenbeek: we gave great dividends in the beginning, the stock price remained the same, and for the first 3 months, shareholders didnt pay attention to our questions and ideas, so, we decided to look in another direction and do things different
[15:25] Ansor Hoorenbeek: i dont know if this is the best way, but, in the moment we didnt pay any dividend, suddenly shareholders appear and gave their opinions... so, now we have a path to follow
[15:26] Konner McDonnell: Hm. So dividends are a reward/punishment system to encourage shareholder interest?
[15:26] Ansor Hoorenbeek: and if shareholders arent happy, well.... we try their way first without any positive results
[15:26] Ansor Hoorenbeek: not at all
[15:28] Ansor Hoorenbeek: if shareholders dont care (that was our impression) we need to make our way here, so, we started to think without their fully consence... and if now they want to give their opinion, its too late, because we are already going in another direction
[15:28] Ansor Hoorenbeek: and we cant go back from here
[15:28] Ansor Hoorenbeek: at least for now
[15:29] Konner McDonnell: Okay, so you went in a different direction because of shareholder apathy? And since the shareholders were apathetic, you didn't consult them about this change of direction?
[15:29] Ansor Hoorenbeek: in a way, yes
[15:29] Ansor Hoorenbeek: but also we need to get paid for our work here
[15:30] Ansor Hoorenbeek: because is the only way to continue growing
[15:31] Konner McDonnell: Okay, so I'm seeing two different things here and on the report. One is the idea that dividends are withheld because investors didn't appreciate them. The other is that you need the money to make the time committment necessary. Which is it?
[15:31] Ansor Hoorenbeek: we need the money to continue working here
[15:32] Ansor Hoorenbeek: the first one is just an explanation about why we started to do some things... i mean one (only one of many) of the reasons about why we started to work inthat direction
[15:35] Ansor Hoorenbeek: long story short: investors never showed some respect for the company, so we started to do things in our own way.... many time we posted in the forum about that and nobody gave us an answer, so, we saw that we can achive some great things here, and we started to do what we need to do to reach that goals
[15:36] Konner McDonnell: I see. So will the increased wage to address your increased time committment be paralleled by an increase in time spent discussing shareholder's concerns? When I say that, I mean specifically on the capex forum.
[15:37] Ansor Hoorenbeek: well, theres a lot of gossip and stupidity on the forum, some personal issues with certain shareholders and the lack of time are reasons why we dont post a lot
[15:38] Ansor Hoorenbeek: but i know that we need to post often
[15:38] Ansor Hoorenbeek: im aware of that
[15:38] Konner McDonnell: Wouldn't effective communication be a deterrant of rampant gossip?
[15:39] Ansor Hoorenbeek: not really, if you navigate the whole hoorenbeek forum you will know what i mean....
[15:39] Ansor Hoorenbeek: anyway, i know that we need to post more often
[15:41] Konner McDonnell: Fair enough. In the report, I see that the cap is "400K -initially-" Is there an idea of how soon after this 400K apiece salary is met that the cap might increase?
[15:42] Ansor Hoorenbeek: it depends only on one thing.....
[15:42] Ansor Hoorenbeek: we are working on hoorenbeek women and we dont know if we will need another designer
[15:43] Ansor Hoorenbeek: if we need another designer (probably not, but im not sure) we need to pay his salary.... and we will pay dividends after that
[15:44] Ansor Hoorenbeek: if we dont need another designer, we will restart paying dividends when we reach the salary of 400k each
[15:44] Konner McDonnell: When it is determined that you should revisit your current salary cap, will your approach be different than it was in Feb?
[15:45] Ansor Hoorenbeek: mmm
[15:45] Ansor Hoorenbeek: i guess so
[15:45] Ansor Hoorenbeek: but im not sure
[15:47] Ansor Hoorenbeek: listen, sorry, but i really have to go.. is 7:45 PM here and i have a meeting in about 30 minutes
[15:47] Konner McDonnell: That's fine. I have only one question left.
[15:47] Ansor Hoorenbeek: if you want we can continue this chat another time
[15:47] Ansor Hoorenbeek: shoot
[15:48] Konner McDonnell: Would you object to my using pieces of this log or posting it in its unedited form fo r public viewing?
[15:50] Ansor Hoorenbeek: not at all... im very tired and my english sucks, but its ok if you want to post parts of the conversation... of course, out of context ppl can miss the whole idea, but do what you want about it
[15:50] Ansor Hoorenbeek: its ok, really
[15:50] Konner McDonnell: I will post the entire thing to avoid having that happen. Thank you for your time, CEO Hoorenbeek. I will hope to see you or your associate on the Capex forum in the near future.
[15:50] Ansor Hoorenbeek: thank you
[15:50] Ansor Hoorenbeek: see you soon
[15:51] Ansor Hoorenbeek: bye
[15:51] Ansor Hoorenbeek: =)

Since I’ve yet to see a transcript from the initial HBK shareholder meeting, I’ll withhold my opinions. If anyone has one handy, I’d appreciate a copy.