What bubble does that pop? I'm confused.
A 10x increase is extremely unlikely. The 0.004 on cryptostocks is already much higher than it was on bf, so I expect 0.007 or something when we get onto a stock exchange.
Wow, what a well-thought-out response, not like the crap minerpart wrote:
OK guys, the new exchange could be with us soon so lets get serious now.
I'm sure some of you have heard of a thing called P/E ratio (price-earnings ratio)?
It's a very simple formula universally used for valuing a listed company and it's shares which most often involves you dividing the share price by the annualised earnings per share.
here is a basic introduction:
http://www.allstarstocks.com/gpage2.htmlSo instead of guessing how much you think share price will go to using your divining rod or a set of Rune stones just use the p/e ratio.
All you need to know is the total amount of BTC that will be paid out in divs to public investors in year 1 and then you divide that by the number of shares to get your annual earnings per share figure. You then choose a share price - lets say the IPO of 0.0025 and divide that by your annual earnings per share figure to get the p/e ratio.
An acceptable p/e ratio to investors in the real world would range from anything from 10:1 to 100:1 - it's going to be based around the company prospects for growth and continued business.
OK so who want's to start? Me? OK-
I think 4justice's table gave a yearly total for public investors (taking into account the drop when Kens shares get divs) of around 40k BTC.
40,000/10,000,000=0.004
0.0025/.004=0.625
So now we need to decide what P/E ratio investors will be happy with. 0.625:1 would put the share price at 0.0025 - obviously. Now if the company has solid prospects and good accounts there is a world of investors out there who would bite your right arm off to get in at a P/E ratio of 0.625:1. It's
incredibly good value - so long as the company is solid.
I would say with BTC rising so commendably that a P/E ration of 10:1 would be conservative - so that would mean a share price of 0.04 > 0.04/0.004=10
Anyone please correct my arithmetic/logic and make comments.
PS - I just checked out what the P/E ratio was on AM when it was at 4btc and paying out around 0.025 per week in divs. It was around 3:1. I think if we are a high profile, open company doing big sales and farming we can exceed 3:1 due to greater investor confidence.
PPS - 4justice's table is I think conservative.