Until at least May 2014, on the initial 40M, a minimum of 20M are retained for growth and expansion and a maximum of 20M can be sold to investors.
In May 2014, or when 0.0005 is payed by share, whichever happens later, an extra 60M are created, for the final total of 100M. On these remaining 60M, a minimum of 20M are retained for growth and expansion and a maximum of 40M can be sold to investors, with a 40M being retained by AMC/Ken.
Right, but *why* 100 million shares? This is a ridiculous number of shares compared to other securities (I mean, ASICminer has 40000 shares, a whole order of magnitude lower). This will just dilute existing shares, make it more difficult to sell shares (because there's always the possibility of flooding the market), and make a high valuation for the company so much harder to justify.
Why not 100M shares? The price per share compensates on the amount of them. This actually makes trading shares easier, look at TAT.AM for example, that divides each AM share by 100, so the 400.000 become, in fact, 40M, and the price adjusts itself accordingly.
As of the time of this writing, up to 40,000,000 will be released over time to the public on a varying time scale as capital is required to complete the project. Any remaining shares not included in the IPO are owned/maintained/controlled by AMC. These shares will be used at the issuers discretion for any uses deemed fit. These uses are not limited to, but may include employment.
Why not IPO all the shares at the same time, right at the beginning, but less of them?
Additionally, right now, how many shares have been issued, how many have been sold, and how many are held in reserve? Those shares which have not been issued aren't receiving dividends, are they? This goes on to my next point.
Because Ken is skipping on getting "free" profits from AMC now. All money is funneled into reinvestment. Around 6M are sold, and 34M in reserve. The 40M are "issued" by BitFunder unto AMC/Ken, when they were created.
Dividends paid on unissued shares after the early-adopter phase will be retained by AMC and added to AMC's growth and expansion fund above until the shares are issued.
So basically, you're diluting the dividends across both issued and unissued shares? First, from my limited reading, unissued/unsold shares don't receive a dividend, so it seems that proper accounting/shareholder practices are not being followed (Right now, 40 million shares have been issued, but have 40 million been sold, and thus eligible for dividends? And then when you issue another 60 million, you'll be diluting the dividend even more so. To even get close to the kinds of dividends other companies are seeing (0.01 btc/share), you'd have to mine something like 40,000 bitcoins per week, even more when it's 100 million shares.
All shares count as "issued" by BitFunder. The dividends are being paid into the 40M. All shares that are still on AMC/Ken receive dividends that are funneled into reinvestment (which makes sense). You can't also compare dividends/share with other companies because the price/share is very different. You can however compare dividends/share price.
The first time I get a piece of the pie will be after a year of work (May 2014), when the rest of the 60M are issued. At that time, more 20M can be sold to investors, and I retain the remaining 40M.
Again, what's the rationale for this? Why are you not making money on the shares now? Additionally, when you issue those 60 million shares, other investors are going to be screwed because the dividend will be split across 100 million, not 40 million.
Because Ken understands that it's much better to reinvest as much as possible right now into growth, than later. When the 60M are issued by BF, yes the dividends will be lower, but the "cooperative" value as a whole will be much better than now, and still increasing. This also rewards earlier investors that helped fund the initial stages of AMC.
As nice as these are, they don't really tell us much. Why all the secrecy? Why the NDA in the first place? Why not give this thing some bloody legitimacy instead of hiding behind a 'oh I'm sorry, but we *really* can't tell you all the details'. People are losing confidence because you're being so secretive!
You can buy AMC now with that risk, or buy AMC later with lesser risk. Share prices will correlate to risk at each time too, I'm sure. Just have to figure it out if you think Ken is lying or not.
Roughy, AMC takes care of the chips, VMC takes care of the machines:
- AMC develops the chip, pays the chip's NRE and sells the chip in bulk to customers (using VMC as intermediary).
- VMC uses AMC's chip (or any other chips) and builds bitcoin miners, paying a royalty cost to AMC whenever its IP is used.
Chip sales: AMC holds IP rights on the Fast-Hash-ONE chips, so AMC contracts with VMC the following services: (a) the representation services to negotiate chip production with eASIC and (b) the re-selling of AMC's chips in bulk. AMC also guarantees chip exclusivity to VMC, so that AMC won't negotiate a chip supply contract to any other bitcoin systems manufacturer. AMC gets 70% back from the profits on the sale of bulk chips, while VMC gets 30%. All of VMC's expenses, including representation, chip stock management and re-shipping expenses to final customers are taken from their 30% profit.
System sales: AMC also allows VMC to buy chips directly from eASIC at the lowest cost, for the manufacturing of bitcoin mining systems. On every sale of these systems or parts of it that contain AMC chips or IP, AMC receives a 10% royalty fee from the total gross sales revenue. Example: if a customer purchases a system for ฿100, AMC receives ฿10, whatever the profit margins for VMC are.
Jesus this is complicated... First off, why not just merge the companies, rather than messing around with something like this convoluted set up?
Second off, how is VMC funded? Where does it get its cashflow from?
Third, why does AMC need VMC to re-sell its chips in bulk? Why can't AMC handle that itself? So, you bulk-sell chips to VMC, VMC sells them on, AMC gets 70% of the profits, VMC 30%? Why do it like that? Why not just have AMC/VMC together, AMC sells the chips and it receives 100% of the profits from these sales?
Fourth, AMC sells chips to VMC, VMC then makes full mining systems (I'm guessing like the jalapenos etc), VMC then sells them on? I get the 10% royalty fee, but where does the other 90% go to? To VMC? And that's owned by who? So AMC does all the heavy lifting, sells its chips for a fee (presumably all of that profit goes 100% to AMC), and then basically only gets 10% royalty fee for something they could sell themselves for 100BTC and get 100% of the profit? You can see why that kind of sucks.
Ugh, my head hurts trying to filter through all the BS, FUD, techno-babble and nonsense in this thread, just to get at some proper bloody answers. I should be entirely open and say that I have invested in this company, but I'm doing my 'due diligence' after the fact, so shame on me perhaps, but nevertheless, there are some serious gaps here that need addressed asap, preferably in a easy to digest summary. I often get the feeling that in anything bitcoin related, people hide behind the razzle-dazzle of vocabulary and jargon. K.I.S.S.
Using this setup AMC/VMC works like any large GPU manufacturer tbh. For example, nVidia designs and produces their chips and reference boards, and sells them to Asus for example. Exactly same model.
VMC is privately held by Ken atm, but I think I've read him talk about opening it to public, just like AMC.
AMC is getting a clean 70% of profits with no incurring expenses. You can't get "100% of profits" because there are always expenses to pay. Anyway like I said, same model as nVidia, AMD, atc.
About the mining systems, AMC gets 10% of the top, but it's VMC that has to buy all the equipment, parts, labor, etc. Don't forget about those. AMC has no expenses here, just 10% clean profit of the top (gross income).
