Delicious Demar Enterprises Derivative Cancelled

On January 7, 2009, Lemur Investments (LEM : ISE) CEO Casper Trebuchet announced an ambitious plan to create a Derivative Financial Product tied directly to LEM(ISE) holdings in Delicious Demar Enterprises (DDE : ISE).

LEM(ISE) has substacial holdings in DDE(ISE), RDX(ISE), CAR(ISE), SIM(ISE), and ITA(VSTEX), and at the time of the January 7th press release, Trebuchet stated, "If this product will sell good we will also issue a corresponding MINI short future on the same shares. Plans exist to create others such vehicles."

LMLFDDE(ISE) passed the ISE democratic community vote 20-12, and appeared to be on it's way to becoming a fixture of the SL Investing Community, further bolstered by a DDE(ISE) December Financials Report reflecting a small profit, and a Q1 Positive Forward Guidance.

Trebuchet requested a trading halt of LMLFDDE(ISE) to set final conditions on January 11, 2009, and reiterated it the next day, explaining, "Sorry for the confusion, but as it is the first such product things are a bit complicated. Normally you wait for a financial report and then you launch the derivative. However, we voted first over the context - what makes sense- but have still the product to define. Votes as they are done at ISE might be an excellent idea for the IPO of companies but not to list derivatives."

Then, on January 15th, Trebuchet called to cancel the entire project, stating, "In other words. I think I have to be realistic and stop this experiment for the time being till further notice. The day has 24 hours and for some there is still the night. I have to confess that I underestimated the work load. One product is fine but makes no sense in the environment we have and two of those are far too much for me. Furthermore I'm more taken in RL right now which also is a strong argument against."

Part of the issue for LEM(ISE) is that to totally manage the risk of a derivative, both a Long and Short position must be taken by the derivative issuer, and Trebuchet wisely decided that with the complications and RL time constraints, that a managed-risk position was not one that he could fully handle.

It has been proven, however, that such a product does in fact have an audience in the wings in the Second Life Investment Community, and only time will tell whether LEM(ISE) or some other Investment Firm or Stock Exchange will pick up where LEM(ISE)'s noble experiement left off.