Moving the assets to the new system.
The new system means more streamlined system of keeping track and accounting.
As you know, the old system allocated voluntary shares in chunks of 30
Euros. Furthermore, the shares were assigned into series. A new series
was created in the beginning of each month out of the new shares booked
during the previous month. These two aspects were designed to make the
operations possible in the face of some arbitrary limitations. (1) The
30 Euro chunks were necessitated by the Finnish coop law that forced us
to name the nominal price of a share. (2) The series, in turn, were
necessary in order to take into account the fact that money had to be
moved first from the member to a Finnish bank account, then manually
from there to our broker account in New York, and from there to the
portfolio. It would have been unfeasible to take each share payment
manually through the whole route individually. Now, both of these
hurdles are obsolete! The voluntary shares do not have to be in chunks
of 30 euros any more, because of the changes in the Finnish law. Also,
the new payment system and database is automated so that we can quote a
daily price for the shares.
The 30-Euro-shares-in-monthly-series model was basically a way to
organize the different entrance points of member shares to the Robin
Hood portfolio, even if the nominal price remained always 30 Euros. This
was made possible by an accounting mechanism (not visible to the
members) where the shares in each series were assigned a value in so
called “u-units”, corresponding to the actual per-series share price.
The calculation for the u-unit price in each series has been the
following: (net asset value - monthly series deposit)/(the sum of all
previous u-units). Then the amount of u-units in each series is
calculated by dividing the monthly deposit by the u-unit price. And
voilà! We know what kind of a piece of the portfolio one gets with 30
Euros at the specific point in time. In other words: the amount of
u-units (and not the number of shares) defines really the value of
member’s assets in the portfolio.
Now, when moving to the new system, as there is no reason for the
artificial complication of the monthly series, the series will be
retired. This will not affect the value of the shares of old members.
The artificial extra accounting transformations are just removed,
because they are no longer necessary.
What will be moved over from the old database is the amount of u-units
each member holds in each series (determined by how many shares she/he
has in each series) and not the number of voluntary shares - as the
number of shares neither has an effect on decision making in the coop
(one member, one vote is the rule) nor affects the value of the member’s
assets, which is really defined by the amount of u-units.
This way the performance of each member’s assets will continue as before
(the month when the shares were booked will still have an effect on the
development of the value), but we get rid of the cumbersome and
labour-intensive series system. In the new system the shares will be
booked in a manner similar to ”ordinary” funds: with a daily price
depending on the performance of the portfolio and the day of purchase.
Consequently, what you will see in the new member pages is different,
because the series will be gone. However, the value of your assets will
not change in any way in the transition. Neither will your rights as a
member. We simply move to a more streamlined system of keeping track and
In sum, in the new system:
- Members will see the value of their investment as before, and it
will behave as before, but the series and number of voluntary shares are
- The one-time membership is still 30 euros and the obligatory
membership share 30 euros. These two give the member full membership
- Voluntary shares are given a daily price and you can purchase them
with any sum you like (and depending on the sum, you will get a
corresponding amount of shares).
- The shares are now, in essence, crypto-tokens, as explained in the April Newsletter.
- As the first new feature, members can also access a “members’ market, where shares can be sold and bought among the members.